"China will pay the tariffs"
“Don’t let them tell you, the fact is — China devalues their currency, they pour money into their system. Because of that, you’re not paying for those tariffs. China’s paying for those tariffs,” the president said, hours after announcing the new set of tariffs on Chinese goods. “Until such time as there is a deal, we will be taxing the hell out of China.” TSMC to raise foundry prices by 5-10% across advanced nodes in 2026
Monica Chen, Taipei; Jingyue Hsiao, DIGITIMES Asia
Monday 1 September 2025
TSMC plans to increase foundry prices for its advanced semiconductor processes by approximately 5% to 10% in 2026, according to sources in the IC design industry.
TSMC(2330.TW) chairman C.C. Wei previously declined to comment directly on whether price hikes would address tariffs, exchange rates, and supply chain challenges, saying only, "What's on my mind cannot be spoken aloud." Nonetheless, industry insiders confirm that TSMC's 2026 foundry pricing strategy is largely finalized, aiming to balance escalating capex and external disruptions while maintaining revenue growth and profitability targets.
As of now, TSMC has not provided an official statement about the 2026 price adjustments.
Price increases will differ by application and customer dynamics
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The price adjustments, covering 5nm, 4nm, and 3nm technologies, vary depending on customer type, application, and order volume, reflecting the company's response to rising costs and external pressures.
The expected price increase ranges from around 5% for smartphone and mobile device chips to roughly 7% for CPUs. High-performance computing (HPC) and artificial intelligence (AI) chips, which demand more advanced processing capabilities, are projected to face approximately a 10% price rise. Customers placing orders for both advanced and mature processes may receive preferential discounts, encouraging multi-node engagement.
Notable is the higher pricing already in place for TSMC's Arizona Fab21 P1 plant, which produces 4nm chips at about 15% higher costs compared to the Southern Taiwan Science Park facility. Despite this site-specific premium, the forthcoming 2026 price adjustments will apply consistently across all locations.
TSMC's advanced process roadmap states that 2nm mass production is expected to begin in late 2025, with monthly capacity anticipated to reach up to 200,000 wafers by 2028. The new N2P process is scheduled for market launch in the latter half of 2026, primarily produced at Baoshan, Hsinchu, and Kaohsiung fabs. Additionally, TSMC's second Arizona fab, focused on 3/2nm technologies, aims for equipment installation in the fourth quarter of 2026 before volume production in 2027, targeting significant demand from US-based clients accounting for over 70% of TSMC's revenue, including names like Apple, Nvidia, AMD, Qualcomm, Intel, and Broadcom.
Industry leaders acknowledge cost increases but support TSMC's pricing approach
Industry executives have voiced support for TSMC's pricing structure amid elevated production costs. Nvidia CEO Jensen Huang stated that while prices for advanced processes are high, they reflect the significant investment and complexity involved in sub-2nm semiconductor manufacturing, making the pricing fair and consistent across customers.
AMD CEO Lisa Su similarly acknowledged that chips made at TSMC's Arizona fabs carry costs between 5% and 20% above those manufactured in Taiwan. AMD's remarks confirm the company's acceptance of higher US fabrication expenses, which TSMC has effectively passed on to customers, thereby mitigating some margin pressures.
According to TSMC's July earnings call, the operation of overseas fabs is expected to cause an initial gross margin dilution of approximately 2% to 3% annually starting in 2025, potentially increasing to 3% to 4% in later years. Despite this, TSMC plans to ramp up capacity at these sites while optimizing cost structures and collaborating with customers and suppliers to manage associated challenges.
Article edited by Jack Wu
digitimes.com |
