TSMC’s Chip Prices Expected to Climb Beyond Initial Estimates Amid Massive Demand and Taiwan’s Currency Gains

The Taiwan Semiconductor Manufacturing Company (TSMC) is reportedly preparing to increase prices for its advanced process nodes and chip packaging services beyond initial forecasts, driven by surging global demand and the recent appreciation of the Taiwan Dollar (TWD). As the leading semiconductor foundry continues to hold dominance over the high-end fabrication market, its strategic pricing adjustments are expected to have a ripple effect across the technology industry.

According to a new report from Taiwan Economic Daily, analysis from Goldman Sachs suggests that TSMC will raise prices for its advanced nodes “particularly those below 5nm” by at least 3% year-over-year, while the cost of its CoWoS (Chip-on-Wafer-on-Substrate) packaging technology could rise by 5%. However, these figures may climb even higher as TSMC adjusts to maintain its gross margins amid strengthening local currency and growing operational costs.

Strong Demand and Market Position Solidify TSMC’s Leverage

TSMC's position as the primary supplier for Apple, NVIDIA, AMD, and other Big Tech companies has given it considerable leverage in pricing decisions. With nearly 100% utilization rates across its 5nm and 3nm nodes and no immediate competitor capable of matching its performance and output at scale, TSMC remains the only viable choice for companies needing leading-edge fabrication technologies.

This pricing move comes at a time when demand for advanced nodes and AI-centric semiconductor solutions is reaching unprecedented levels. The booming interest in generative AI, data center infrastructure, and high-performance consumer electronics continues to place pressure on supply chains, elevating TSMC’s role in global production even further.

A Continued Uptrend in Revenue and Market Share

Market analysts, including Charles Shi from Needham, have forecast that TSMC’s annual revenue could surpass $160 billion by 2027, as the company continues to absorb more of the foundry market share potentially exceeding 75% dominance in the segment. With rivals like Intel and Samsung still lagging in delivering consistent results at scale in sub-5nm manufacturing, TSMC’s pricing power appears poised to strengthen even more.

Additionally, the appreciation of the Taiwan Dollar means that while costs have increased domestically, TSMC’s global clients, mostly paying in USD, will bear the brunt of the margin-preserving price hikes.

As demand shows no signs of slowing, and with TSMC’s fabrication plants running near or at full capacity, these new pricing strategies reflect a calculated effort to maintain profitability while scaling production in an increasingly expensive operational landscape.

What do you think about TSMC’s price increases? Will this drive innovation or create more hurdles for smaller tech players? Share your thoughts below.