TSMC Eyes 2027 Price Hikes as US Expansion Squeezes Margins

TSMC is expanding its US footprint with additional wafer fabrication and advanced packaging capacity as Washington pushes to bring more semiconductor production onshore. The strategy puts manufacturing closer to major customers and reduces geopolitical supply risks, but it also exposes the chipmaker to substantially higher construction, labor and operating expenses than in Taiwan, creating a long-term trade-off between global resilience and profitability.

TSMC’s chief financial officer has warned that the ramp-up of overseas plants could reduce the company’s gross margin by 2 to 4 percentage points over the next several years. With US production costs estimated to be 20% to 50% above those in Taiwan, TSMC is reportedly considering wafer-foundry price increases of 5% to 10% starting in 2027, while additional high-performance computing, or HPC, chip orders may command a separate premium.