It is without doubt that TSMC makes some of the best semiconductors in the market. This is why many big tech companies, like Apple, Qualcomm, AMD, NVIDIA, and MediaTek, are flocking to them. However, it seems that TSMC’s dominance comes with a price, quite literally. According to a report from the Commercial Times (via Abhishek Yadav), TSMC is raising prices again.
TSMC is raising prices again
According to the report, TSMC is raising prices again, and it is expected to continue doing that every year. This applies to the company’s 5nm nodes and below, with yearly hikes ranging from 3-5%. However, some reports suggest that it could even go up to 10% per year, depending on the node.
Yadav did some calculations based on the 10% figure, which suggests that come 2029, the prices of TSMC’s chips could be around 146.41% in 2029. That’s quite a huge markup, and companies probably have no choice but to pay. However, it also means that profit margins will shrink unless those costs are passed down to customers.
The need for Samsung to step in
That being said, the increase in prices may benefit TSMC for the short-term. However, if it keeps on going at this rate, other companies might start seeking alternatives, like Samsung. At the moment, Samsung is probably the closest competitor to TSMC. The company has its own manufacturing services.
However, reports have suggested that Samsung’s yield rates aren’t as good as TSMC. This is why companies like Qualcomm have gone back to TSMC again and again. But Samsung has reportedly dropped close to $1 billion in an investment in high-end lithography machines. This is expected to help Samsung bring it closer to TSMC’s manufacturing capabilities.
It might be a while before we see any change. 2026 will usher in the era of 2nm chips, and most companies are already locked in with TSMC. Samsung is expected to debut its own 2nm chips with the Exynos 2600. If it does well, maybe other companies could start diversifying their supply chain and offload some of their semiconductor needs to Samsung. This could potentially reduce overall costs, which will also help keep the prices of phones and computers more stable.
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