Nikkei Asia has reported that TSMC plans to raise prices for its advanced-node and mature-node semiconductor manufacturing services starting in early 2027. According to the report, base prices will rise 5–10% depending on the customer and product, while additional orders for high-performance computing (HPC) chips that exceed a customer's original forecast will carry a further 10–15% premium. Adding the two ceilings together yields 25%, but that figure does not apply uniformly to all products. What emerges from this proposed revision is that TSMC intends to price its standard annual contracts differently from orders squeezed in later onto already-tight advanced-node lines.
Standard Rate of 5–10%, Overage Surcharge of 10–15%
The base price revision reportedly covers not only what TSMC defines as advanced nodes (7nm and below) but also mature nodes such as 12nm, 16nm, and 28nm. The increase for mature nodes tops out at 10%, with some products seeing smaller hikes. According to Nikkei Asia, negotiations with customers began around June and concluded in July. The new prices are expected to take effect starting in early 2027.
An even higher rate is expected to apply when customers add HPC production capacity beyond the demand forecasts they originally submitted to TSMC. Nikkei Asia reports that, on top of the base revision, a premium of 10–15% will be set for such cases. This creates a split in pricing between volumes planned for the full year and volumes secured after demand swells beyond expectations. For TSMC, at a time when its room to expand capacity is limited, this functions as a mechanism for allocating the cost of additional capacity to customers whose forecasts fell short.
TSMC has not confirmed the price revision. In response to Taiwan's Economic Daily News, the company said it would not comment on pricing matters, but added that its pricing strategy is "strategic, not opportunistic," and that it works closely with customers to deliver value. The rates and scope reported in the media are not the company's published price list.
The Conditions Under Which the "Up to 25%" Figure Applies
The "up to 25%" figure is simply the sum of the 10% ceiling on the base price and the 15% ceiling on the additional HPC allocation. It does not mean a flat 25% surcharge is being imposed on ordinary orders; rather, it reflects a scenario where both ceilings apply simultaneously to the same additional order. The base price increase of 5–10% varies by customer and product. The reported ceiling for the overall base revision is 10%, and anything beyond that is reported as applying specifically to HPC orders that exceed forecasts.
Some uncertainty remains in how the calculation actually works. It has not been disclosed whether the 10–15% premium is added on top of the old price, or multiplied sequentially onto the already-revised price. In the former case, the combined ceiling would indeed be 25%; in the latter, the final multiplier would differ. The headline figure of 25% alone is not enough to pin down the actual amount that will appear on a customer's invoice.
The impact on finished products will also not scale at the same rate. Payments to the foundry are just one part of the total cost that makes up CPUs, GPUs, smartphones, and servers, and the final burden will vary depending on die size, yield, advanced packaging, memory, and each company's contract terms. A 5–10% revision in manufacturing prices does not necessarily translate into retail prices rising by the same percentage.
Advanced Nodes at 77%, HPC Growing to 66% of Revenue
In TSMC's Q2 2026 earnings, advanced nodes of 7nm and below accounted for 77% of wafer revenue. The breakdown was 3% for 2nm, 30% for 3nm, 33% for 5nm, and 11% for 7nm. The scope of the base price revision already covers the bulk of the company's wafer business.
By application, HPC revenue grew 20% quarter-over-quarter and reached 66% of total company revenue. Smartphones accounted for 22%. Not all of HPC revenue consists of overage orders beyond forecast, so the 66% figure cannot be treated as entirely subject to the premium rate. Still, at a time when both advanced nodes and HPC each represent the core of the company's revenue, there is considerable room to apply a separate rate to HPC orders that exceed forecasts.
Meanwhile, demand and supply conditions for mature nodes are not uniform. At the July 16 earnings call, Chairman and CEO C.C. Wei explained that power management ICs and sensors for AI data centers remain in short supply, but that demand in other areas, including consumer applications, is not particularly strong. The reported price hikes for mature nodes should be understood not as a response to across-the-board supply shortages, but as a revision that broadly passes through rising costs for materials, equipment, and overseas fab construction into pricing.
Capital Expenditure of $60–64 Billion and Pricing Decisions
TSMC has raised its 2026 capital expenditure plan to $60–64 billion, with 70–80% of that directed toward advanced nodes. Wei cited growing customer demand as the main reason for the increase, adding equipment price inflation as another factor. The rise in material costs, manufacturing equipment costs, and overseas fab construction costs reported by Nikkei Asia is consistent with the investment burden the company disclosed in its earnings.
Current profitability remains strong. Gross margin for Q2 stood at 67.7%. However, TSMC expects that the rapid ramp-up of 2nm production will drag down gross margin by 3–4 percentage points in the second half of 2026. The dilution from ramping up overseas fabs is also expected to widen from an initial 2–3 percentage points to 3–4 percentage points later on. Current profitability and the cost of ramping up the next round of capacity need to be considered separately.
Regarding pricing strategy, Wei explained that TSMC will not impose sudden four- or five-fold price increases that would make it impossible for customers to continue their business, but will instead secure gross margins that can support long-term capacity expansion. The two-tiered pricing structure reported here is consistent with that stance: base prices are revised broadly and moderately, while unplanned HPC demand is charged a higher premium. That said, TSMC itself has not confirmed the rates for 2027.
What needs to be verified in early 2027 are the base revision rates by customer and product, and the conditions under which the premium applies to volumes exceeding forecast. Only when both ceilings apply to the same order does the "equivalent to 25%" figure come close to matching actual billed amounts. Until real invoices are issued, it is important not to conflate the overall base revision, capped at 10%, with the exceptional surcharge for additional HPC allocations.