TSMC Plans to Increase Prices of Advanced Chips by Up to 10% to Sustain Profit Margins Amid Significant US Tariffs

TSMC Plans to Increase Prices of Advanced Chips by Up to 10% to Sustain Profit Margins Amid Significant US Tariffs

Recent reports indicate that TSMC (Taiwan Semiconductor Manufacturing Company) is preparing to implement a price hike across its advanced chip manufacturing nodes. The increase in prices comes as a response to ongoing supply chain issues that have negatively impacted the company’s profit margins.

TSMC’s Upcoming Price Hikes on Advanced Nodes

As the leading semiconductor provider for major technology corporations, TSMC holds a dominant market position, largely fueled by the surge in demand driven by artificial intelligence advancements. Currently, the company faces limitations on its order capacity. Moreover, challenges posed by US tariffs on products from its Taiwan operations further compound these issues. According to a report by DigiTimes, TSMC is taking measures to raise prices by 5% to 10% on its cutting-edge fabrication processes.

The planned price increases have already been relayed to partner foundries, impacting nodes such as 5nm, 4nm, 3nm, and 2nm. Consequently, tech giants like NVIDIA and Apple will face increased costs for their semiconductor requirements. Interestingly, the recent appreciation of the Taiwanese dollar has also necessitated this pricing adjustment to help TSMC maintain its profit levels, although the firm is expected to provide discounts on older manufacturing nodes.

Rapidus semiconductor facility in Japan aiming for 2nm chip mass production by 2027 amid competition from TSMC and Samsung

Furthermore, TSMC’s commitment to the US market is apparent, with the company significantly increasing its investment to approximately $300 billion. The establishment of new production lines at its Arizona facility is aimed at enhancing advanced packaging and chip manufacturing capabilities. With plans to scale to 2nm technology and support an independent packaging supply chain within the United States, experts had anticipated that such substantial investments would lead to a rise in chip prices.

At present, TSMC has virtually no significant competitors, allowing it to dictate pricing within the market. Despite controlling over 50% of the industry share, TSMC has maintained a relatively competitive pricing strategy, which is integral to its widespread popularity and customer loyalty.

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