[News] TSMC to Implement a Significant Price Hike

As per foreign media reports, Taiwan Semiconductor Manufacturing Company (TSMC) is preparing to implement large-scale price adjustments over the coming years—a move expected to significantly impact chip production costs for major clients like Apple and NVIDIA. The driving forces behind this pricing shift are TSMC’s escalating manufacturing expenses, particularly its massive investments in Arizona, as well as its unrivaled dominance in the global foundry market.

Reports indicate that starting in 2026, TSMC plans to raise prices by 5-10% for advanced nodes below 5nm, including the 2nm process scheduled for mass production by late 2025. Currently, 3nm wafers are priced at around USD 20,000 each, while 2nm wafers are expected to cost at least 50% more—exceeding USD 30,000 per wafer—with further increases possible. TSMC has already notified key clients of its pricing strategy. In contrast, the company may consider lowering prices for mature nodes, where cost pressures are less pronounced.

One of the primary drivers behind the hikes is the sharp rise in production costs. TSMC has invested more than USD 65 billion into its Arizona fabs, where construction and operational expenses are proving a major burden. The first Arizona fab began producing 4nm chips in early 2025, supplying Apple and NVIDIA, while the second facility is expected to start volume production of sub-3nm processes as early as 2027.

During its July 2025 earnings call, TSMC acknowledged that overseas fabs will dilute its gross margin by 2-3% since 2025, with the impact potentially rising to 3- 4% over the long term. To uphold its long-standing commitment to maintaining gross margins above 53%, the company sees price increases as unavoidable. AMD CEO Lisa Su previously confirmed that chips produced at TSMC’s Arizona fabs cost 5-20% more than those manufactured in Taiwan, citing tariffs and expansion costs as additional factors driving up expenses.

TSMC’s ability to pass on rising costs to its customers is underpinned by its unmatched market position. Data from TrendForce shows that in Q2 2025, TSMC captured a record 70.2% share of the global foundry market—widening the gap with runner-up Samsung Electronics to 62.9 percentage points. This commanding lead gives TSMC overwhelming leverage in pricing negotiations.

(Photo credit: TSMC)