Report: TSMC to Raise Wafer Foundry Prices by 3% to 6% Starting January Next Year, Order Visibility Extended to 2030

The new round of TSMC's price hike cycle has arrived, expanding from advanced process nodes to the entire semiconductor supply chain.

On Wednesday, according to Digitimes citing supply chain sources, TSMC has confirmed that starting from January 2027, wafer out prices will be adjusted by process technology, with an increase of approximately 3% to 6%, led by advanced nodes.

Currently, TSMC’s 8-inch fabs are running at over 100% utilization and nodes below 45nm are fully loaded. Order visibility has already extended through 2030.

This round of price hikes will directly raise customers’ wafer costs and gradually transmit through the supply chain. Foundry peers such as Samsung Electronics, Intel, UMC, and VIS, as well as OSATs and IC design houses, are all under pressure to follow suit in adjusting their quotes.

Supply chain sources pointed out that capacity for TSMC’s 2nm and 3nm processes is in short supply, while bottlenecks in advanced packaging technologies like CoWoS remain unsolved—making it hard for clients to switch suppliers even in the face of price hikes.

TSMC's US ADRs fell 1.2% on Wednesday.

The driving force behind this round of price hikes is the broad-based chip demand expansion fueled by AI data center construction.

AI-driven demand is no longer limited to GPUs, ASICs, and high-bandwidth memory (HBM). The buildout of data centers is simultaneously boosting orders for mature node products such as PMICs, MCUs, MOSFETs, driver ICs, analog ICs, MEMS, mixed-signal ICs, and sensors.

High-speed optical communication components, silicon interposers, and various packaging materials have also benefited from rising AI server shipments.

The number and diversity of chips required per AI server have risen significantly compared with recent years. Demands now cover not only computing, but also power delivery, network communications, and optical communications, giving foundries a coverage breadth far greater than before.

VIS is a direct beneficiary of this spillover effect—the 8-inch foundry market will be in short supply through 2026, order visibility stands at 3 to 5 months, and current utilization exceeds 90%. Strong demand is expected to persist in the second half of the year.

This time, TSMC did not implement a uniform price hike across all nodes, but rather adopted tiered pricing based on process technology and product category. Advanced nodes such as 2nm and 3nm, being more expensive, saw the largest increases and clients are still competing for capacity; mature and specialty nodes are negotiated individually based on product, utilization, and customer circumstances.

Other foundries have gradually followed suit. UMC, PSMC, and VIS have all announced price hike strategies, with effects expected to continue through 2027.

Mature node foundries that previously suffered from weak consumer demand and low utilization rates are now seeing significant improvements in production scheduling thanks to the return of AI chip orders, boosting their bargaining power.

TSMC’s price adjustment forces IC design companies to re-evaluate their product cost structures.

According to supply chain insiders, higher-end products like GPUs and ASICs have greater ticket prices and can more easily pass on costs; however, for mature node MCUs, PMICs, and consumer ICs, fierce market competition makes it uncertain whether increased costs can be fully reflected in end pricing.

IC design houses also noted that cost pressures in 2027 will go beyond foundry price hikes; increases in OSAT, substrate, material, and memory costs will all be fully accounted into product costs.

This round of price hikes is also driven by cost factors.

It is estimated that TSMC’s cost to build fabs in the US is about four to five times that in Taiwan. TSMC previously stated that the initial ramp-up for 2nm mass production will dilute its gross margin by about 3 to 4 percentage points, and overseas fabs may bring an additional 2 to 3 percentage points of gross margin pressure in the coming years. In this context, raising wafer out prices is in line with market expectations.

TSMC Chairman Mark Liu once said that choosing a foundry partner is not "like buying milk at 7-Eleven, where you can just switch the next day if not satisfied."

Supply chain sources noted that the transfer of orders by major customers such as Google, Apple, and Nvidia is mostly related to non-core chips or small-scale orders; there have not been significant changes in wafer demand for TSMC’s main high-end customers. TSMC remains highly confident in demand for 2026, is continuing to expand capex, and has raised its full-year revenue growth forecast in USD terms.