TSMC is raising prices on all advanced process nodes for the first time in three years, marking the foundry's strongest pricing leverage since the pandemic-era chip shortage.
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TSMC raises advanced chip prices 5% to 10% as AI demand surges
TSMC is raising prices on all advanced process nodes for the first time in three years, marking the foundry's strongest pricing leverage since the pandemic-era chip shortage.
TSMC is raising prices 5% to 10% across all advanced nodes from 7nm down to 3nm, covering about 75% of its wafer revenue and representing the foundry's broadest price increase since 2022. The adjustment affects every major chip designer that relies on TSMC's leading-edge manufacturing, including Apple, Nvidia, Advanced Micro Devices, and Qualcomm.
"TSMC has notified customers of the adjustment across the board, not just the 3nm node that was widely expected," Tim Culpan, a technology analyst who covers the semiconductor supply chain, said. "This is a broad-based move that reflects the structural imbalance between AI-driven demand and available capacity."
The increase applies to all process technologies at 7nm and below, according to Taiwan's Commercial Times. TSMC's 3nm node, which powers Nvidia's next-generation Blackwell Ultra AI chips and Apple's A19 and M5 processors, commands the highest premium. The company's 5nm and 7nm nodes, still in high demand for AI accelerators, smartphone processors, and networking chips, are also included. Advanced nodes generated the bulk of TSMC's roughly NT$2.9 trillion ($89 billion) in 2025 revenue.
The price hike reflects TSMC's strongest pricing leverage since the pandemic-era shortage as AI infrastructure investment drives demand for leading-edge silicon. Chief Executive Officer C.C. Wei told investors in April that "global chip supply will not meet AI-fueled demand for years" and projected more than 30% revenue growth for 2026. The company is investing $250 billion in U.S. fabrication plants and ramping 2nm mass production, which will carry even higher wafer costs than current nodes.
What the price increase means for the supply chain
For TSMC, the 5% to 10% uplift could add $4 billion to $8 billion in annual revenue, based on the roughly $80 billion in advanced-node revenue the company generated last year. The increase also helps offset the rising cost of advanced extreme ultraviolet lithography tools, which can exceed $400 million per machine, and the expense of building new fabs in Arizona, Germany, and Japan.
For customers, the higher wafer costs arrive at a delicate moment. Nvidia, which sources its most advanced AI accelerators exclusively from TSMC, faces its own pricing pressure as hyperscalers demand lower per-token inference costs. Apple, TSMC's largest customer by revenue, is navigating softer iPhone demand in China. AMD is fighting for AI GPU market share against Nvidia's dominant position. Each company will need to decide whether to absorb the cost or pass it to end customers.
The price increase also creates an opening for Samsung Foundry, which has been struggling to win major advanced-node orders. Samsung already uses Gate-All-Around transistor technology in its 3nm process and could offer more competitive pricing to customers seeking an alternative to TSMC. However, TSMC's superior yield rates and manufacturing track record have kept most major customers locked in. Nvidia, Apple, and Qualcomm are expected to maintain TSMC as their primary foundry partner, though Samsung could capture orders for automotive, robotics, and edge AI chips where price sensitivity is higher.
TSMC shares, up 41% year to date and 99% over the past 12 months, trade at about 29 times forward earnings. The stock closed at $425.83 on June 17, about 4% below its 52-week high of $449.33. Wall Street's consensus target stands at $467.84, implying about 10% upside. Bernstein projects 28% compound annual EPS growth through 2028, a trajectory that higher wafer prices would support.
This article is for informational purposes only and does not constitute investment advice.
