Catenaa, Tuesday, July 21, 2026- TSMC is set to raise prices for both advanced and mature chip production services by up to 10% in 2027 to reflect rising costs for materials.
Nikkei Asia reported that the world’s biggest contract chipmaker held discussions with clients about the price increases, including for process technologies at the 7-nanometer and more advanced levels, which accounted for about 77% of TSMC’s revenue in the most recent April-June quarter.
The base price hikes range from 5% to 10%, depending on the customer and product, the report said.
For additional high-performance computing chip orders beyond customers’ original forecasts, the company plans to charge an extra 10% to 15% premium on top of the base increase.
As a result, the total price increase for some advanced chip orders could exceed 10%, the report said.
For mature-node production, covering 12-nm, 16-nm, 28-nm technologies and other legacy processes, the chipmaker plans to raise prices by up to 10%, although increases for some products will be below that level, the sources told Nikkei Asia.
Mature-node chips accounted for about 23% of the company’s revenue in the latest quarter.
The negotiations began around June and were finalized in July, with the new pricing set to take effect at the start of 2027, sources told Nikkei Asia.
Generally, the smaller the nanometer grade, the more advanced and powerful the chips are. Mature chips, however, remain important for a wide range of essential electronics applications, including power management and sensors.
TSMC’s major clients include top chip developers such as Nvidia, Apple, Google, Amazon, Qualcomm, Arm and MediaTek.
According to industry executives familiar with TSMC’s pricing strategy, the chipmaker has opted for a less aggressive approach. Rather than raising prices immediately, TSMC decided to delay the increases until 2027, giving customers time to adjust after negotiations concluded.
Many chipmakers have raised prices this year to offset rising costs for labor, materials, chemicals and logistics.
The world’s two largest microprocessor makers, Intel and AMD, increased prices several months ago amid supply constraints driven by demand for new agentic AI computing, Nikkei first reported.
TSMC affiliate Vanguard International Semiconductor has also implemented price hikes, while Taiwan’s second-largest contract chipmaker, UMC, began raising prices in July to reflect broader cost increases.
Nikkei Asia previously reported that inflationary pressures are rippling through the technology supply chain, with prices rising for products and services ranging from glass cloth and printed circuit boards to lasers and chip packaging.
At the same time, the global technology industry is bracing for unprecedented shortages of both DRAM and NAND flash memory as unprecedented AI infrastructure investments continue to drive demand.
Moreover, when the US-Iran war started earlier this year, TSMC warned that heightened geopolitical tensions would add pressure on critical gas supplies and increase costs.
Chief Financial Officer Wendell Huang said during the company’s earnings briefing in July that its overseas fab expansion and the ramp-up of mass production at its cutting-edge 2-nanometer facilities would continue to weigh on profit margins.
TSMC announced an additional $100 billion investment in Arizona and raised its 2026 capital spending plan to as much as $64 billion.
