The world’s largest chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC), told the BBC that rising costs driven by inflation are squeezing the business, and that price increases cannot be ruled out in the future. The disclosure comes as TSMC remains in the vanguard of chip production, supplying advanced nodes for Nvidia, AMD and Apple, and as the company broadens manufacturing outside Taiwan to meet growing demand for AI infrastructure.
TSMC’s chief financial officer, Wendell Huang, emphasized that the company would not implement abrupt, drastic price jumps. “We reflect our value,” he said, pointing to the firm’s technology leadership and manufacturing excellence as the basis for its pricing approach. Huang stressed that any adjustments would be measured and aligned with long-term value rather than sudden moves.
In the interview conducted ahead of its annual shareholder meeting in Hsinchu, Huang also pushed back against the idea that the AI surge constitutes a bubble or that expansion abroad is primarily a response to geopolitical pressure. He described overseas capacity growth as demand-driven, undertaken to meet customer needs and to support the company’s expansion strategy, not as a policy reaction.
The interview occurred amid heightened US-China tensions over semiconductors. Washington has pressed leading chipmakers to diversify and expand domestic production to bolster supply chain resilience. Huang said the decision to move some capacity overseas is driven by customer demand, while affirming that the most advanced manufacturing will stay in Taiwan.
Huang noted that relocating the world’s most advanced fabrication processes could take five to ten years or longer, a timeline that intersects with US industrial policy aims. He referenced TSMC’s substantial commitment of about $165 billion to its Arizona plant as part of broader capacity expansion, underscoring the strategic nature of the push to diversify production locations.
Regarding pricing, Huang acknowledged that inflation has raised costs but did not commit to specific increases. Earlier, TSMC’s chairman and CEO CC Wei told shareholders he would “like” to raise prices, signaling ongoing consideration of pricing amid a market stressed by AI-related demand and higher capital expenditure.
TSMC’s stock has benefited in the past year from rising demand for AI chips, with Huang describing the company as operating under pressure to keep pace with client needs. He said, “We’re doing everything we can, wherever we can, and however we can.”
Investors continue to weigh whether the immense spending on AI infrastructure can be sustained, as global tech equities have faced volatility. Huang reiterated that the AI megatrend remains compelling, noting that the company talks with customers and their own clients—hyper-scalers—who are evaluating ongoing investments in AI capacity.
This tone from TSMC highlights how inflationary pressures, supply chain diversification, and capex commitments intersect to shape pricing power and the trajectory of AI hardware costs over the coming years.
