If you were hoping for cheaper processors or graphics cards in the next few years, there’s some bad news — TSMC is raising chip prices starting in 2026. The Taiwanese manufacturer, which builds most of the world’s high-end CPUs and GPUs, has told its partners that all advanced manufacturing nodes under 5 nm will get 3% to 5% more expensive every year for at least four years. That covers the 2 nm, 3 nm, and 4 nm processes used in chips from AMD, NVIDIA, Apple, and Qualcomm, among others. The price hikes are meant to offset rising energy, material, and infrastructure costs, while also funding TSMC’s huge global expansion. The company is currently building or upgrading factories in Taiwan, Japan, and the United States, and it needs additional revenue to maintain its growth and keep up with global demand for advanced chips.

A big part of the story is AI. Demand for chips used in data centers and AI training has exploded, and TSMC now produces more than 80% of all AI chips worldwide. That puts the company in a strong position to adjust prices as its production lines run at full capacity. Right now, advanced nodes generate about 74% of TSMC’s total income — with 5 nm responsible for 37% and 3 nm for 23%. Once 2 nm production ramps up in 2026, that figure will exceed 75%. The company says the higher prices aren’t just about profits; they’re also intended to keep TSMC ahead technologically and fund research into future manufacturing processes like 1.4 nm.

To make room for this focus, TSMC is shifting engineers and equipment away from older nodes like 6 nm and 7 nm. That could leave some customers in automotive or industrial markets—who still depend on mature process technologies—with fewer manufacturing options or higher costs. The company’s leadership says this isn’t a one-time adjustment but part of a multi-year price realignment that could continue through 2030. Given that most modern CPUs and GPUs use TSMC’s advanced nodes, the impact will almost certainly reach consumers. Hardware built after 2026—especially AI accelerators, gaming GPUs, and next-generation desktop processors—will likely cost more. Competitors such as Intel and Samsung are working to close the gap with their own 2 nm technologies, but TSMC remains the market leader by a wide margin. Its ability to command higher prices without losing business highlights just how critical it has become to the global semiconductor ecosystem.

Source: digitimes