TSMC admits its ‘jealous’ of memory chipmakers’ margins, but is limiting its own price hike because its customers would not survive price increases of ‘four to five times’
TSMC has announced a 10-15% price increase for chip manufacturing services beginning in 2027, driven by rising material costs and significant overseas fab construction projects, including a planned 2nm manufacturing facility in Arizona. The company acknowledged being “jealous” of memory chipmakers’ substantially higher profit margins but stated it is deliberately restraining its own price increases to prevent customer collapse. According to TSMC executives, customers could not sustain price hikes of four to five times current levels, prompting the foundry to limit increases to 5-10% across its various chip production services.
The semiconductor industry closely monitors TSMC’s pricing decisions, as the company’s moves typically cascade throughout the manufacturing sector. The price increases reflect the capital-intensive nature of advanced chip fabrication and ongoing global competition in semiconductor manufacturing, particularly as companies pursue geographic diversification away from Taiwan amid geopolitical tensions. TSMC’s measured approach suggests the company prioritizes maintaining customer viability over maximizing short-term margins—a strategic calculation that contrasts sharply with memory chipmakers’ recent aggressive pricing strategies.