TSMC Reportedly Raising Prices on 5nm and Smaller Nodes, Forcing Big Tech to Pay More
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest and most influential contract chipmaker, is reportedly preparing to raise prices for its most advanced semiconductor nodes, potentially impacting nearly every major technology company that relies on its manufacturing capacity. According to a report from DigiTimes, TSMC has informed its foundry partners that it will increase prices for its cutting-edge 5nm, 4nm, 3nm, and upcoming 2nm nodes by approximately 5% to 10%.
Why TSMC Is Raising Prices
Several factors appear to be driving the decision:
Soaring AI demand: Fueled by NVIDIA, AMD, and other AI-focused players, orders for advanced nodes have already maxed out TSMC’s available capacity.
US tariffs and global expansion costs: TSMC continues to face tariffs on its Taiwan-based operations while simultaneously investing heavily in US manufacturing. Its Arizona fabs alone represent a long-term investment of over $300 billion to bring advanced packaging and chipmaking to American soil.
Currency fluctuations: The recent appreciation of the Taiwan dollar has squeezed TSMC’s profit margins, creating pressure to adjust pricing in order to maintain financial stability.
Strategic positioning: While TSMC controls more than 50% of global foundry market share, it has historically priced its services competitively to maintain strong customer relationships. The price hike indicates that it is now leveraging its dominant position to balance costs with future expansion plans.
Impact on Major Customers
The companies most affected by this move will be TSMC’s top clients, which include:
Apple: Heavily dependent on TSMC for its A-series and M-series processors.
NVIDIA: The driving force behind AI and GPU demand, whose orders occupy a significant portion of TSMC’s advanced capacity.
Other major tech players: Qualcomm, AMD, and Broadcom, who also rely on TSMC’s cutting-edge nodes for mobile, server, and networking silicon.
For these companies, the reported 5–10% hike could mean hundreds of millions in additional costs, depending on volume commitments.
Interestingly, while advanced processes are getting more expensive, TSMC is expected to reduce pricing on older nodes, keeping them attractive for industries not requiring bleeding-edge performance, such as IoT, automotive, and lower-cost consumer electronics.
Global Competition: Rapidus and Samsung in the Mix
The timing of the report also highlights the growing competition in the semiconductor space. Japan’s Rapidus, which recently announced its 2nm “2HP” node for customer deployment by 2026–2027, is pushing to establish itself as a legitimate rival, with strong government support and partnerships with firms like IBM. Meanwhile, Samsung Foundry continues to invest heavily in GAA-based process technologies to catch up to TSMC.
Still, as of today, TSMC remains unmatched in volume production, yield maturity, and customer trust. This makes it possible for the Taiwanese giant to adjust pricing without fear of immediately losing its largest accounts.
Looking Ahead
TSMC’s pricing strategy signals a shift in the semiconductor supply chain landscape. While the firm has long maintained competitive pricing despite its dominance, the combination of AI-driven demand, massive global investment costs, and currency pressures makes this price adjustment appear inevitable.
For big tech, this means tighter margins or higher product costs downstream. For TSMC, it strengthens financial sustainability as it moves aggressively toward 2nm production and advanced packaging leadership.
Do you think big tech companies like Apple and NVIDIA will absorb these higher costs, or will we see these increases passed directly on to consumers in the next wave of products?
