Taiwan Semiconductor Manufacturing Co. (TSMC) will reportedly raise prices for chip production services by 10% in 2027, according to Nikkei.
TSMC serves as the world’s largest chip manufacturer and produces semiconductors for computer companies such as Apple, Google and Amazon. The chipmaker reportedly held discussions with clients about increasing prices for both advanced and more mature chips due to increasing costs for materials, manufacturing equipment and construction of overseas chip plants, according to Nikkei.
Computers use advanced chips for high-end functions such as artificial intelligence (AI) processing, while everyday consumer products use mature chips for power management and sensors, according to Nikkei.
The Taiwanese company produces more than 90% of the world’s most advanced chips, according to the Global Taiwan Institute.
TSMC finalized negotiations in July and the company will raise prices starting at the beginning of 2027, the outlet wrote, citing people with knowledge of the proceedings.
The company did not respond to a request for comment from the Daily Caller News Foundation.
“TSMC does not comment on pricing. Our pricing strategy is strategic, not opportunistic. We will continue to work closely with customers and sell our value to them,” the company told Nikkei in a written statement.
The company warned that America’s war against Iran would add more pressure on critical gas supplies and may lead to increase in costs.
Tech companies said they plan to raise prices in 2026 to offset rising costs for labor, materials and other costs.
Intel and AMD, the world’s two largest microprocessor manufacturers, increased prices this year as they face supply constraints and increased demand from artificial intelligence (AI) companies.
AI companies’ incredible demand for random access memory (RAM) and computer storage has created shortages. Experts have called the surge in RAM prices and limited supply, “RAMageddon.”
“We don’t suddenly increase our price … four or five times,” TSMC Chairman C.C. Wei said during the company’s earnings briefing in July.
“We earn our value and we make sure that our profit, our gross margin is enough for our long-term sustaining expansion,” Wei continued. “That’s to the benefit of my customers and TSMC also. That’s our philosophy.”
Tech companies have raised prices as a result of the higher costs of computer hardware.
Apple in June said that it would raise iPad and MacBook prices, Reuters reported.
“We have never seen a component price increase this much, this quickly. We have shielded our customers from these increases so far, but we have now reached a point where we need to begin raising prices on a number of products, including today’s increases for iPad and Mac,” Apple said in a statement at the time.
“Honestly, it’s still getting worse,” Yazan Aldehayyat, an engineer for the gaming company Valve, said in July. “Just in case people are not aware. What people are seeing on retail shelves right now, from our observations, is lagging what we’re seeing from a bulk supply by at least three to six months.”
(DCNF)