The global AI computing boom has given TSMC unparalleled pricing power. According to an exclusive report by veteran tech analyst Tim Culpan on his Culpium subscription platform, TSMC is secretly informing clients of a sweeping price hike that goes far beyond market expectations. The increase covers all advanced process nodes from 7nm down to 3nm, with a range of 5% to 10%.
Price hike scope triples, 7nm included
Earlier local media reports focused on the strained 3nm supply. However, Culpium reveals the impacted revenue scope is three times larger than initially believed. While 3nm accounted for only 25% of wafer revenue in Q1, the entire advanced node portfolio (7nm, 5nm, 3nm, etc.) represents 75% of total wafer sales. Even the 7nm node — the first to use EUV lithography — is on the list. Some clients have been told that mature nodes could also face future adjustments. The new pricing is already being applied incrementally, with clients forced to incorporate higher costs into new purchase orders even before existing contracts are formally amended.
Management directive, official response
The drive came from a top-level directive early this year to TSMC's business development and sales teams. Seeing memory giants like Samsung, SK Hynix, and Micron raise prices 65% to 90% amid the AI frenzy, TSMC wanted its share. Executives instructed employees to tie the price increase to TSMC's value proposition and technological superiority.
When asked by Culpium, TSMC did not deny the move, stating: "We do not comment on pricing strategy. Our pricing is strategic, not opportunistic. TSMC continues to work closely with clients to sell our value." The analyst interprets this as a tacit confirmation, echoing Chairman C.C. Wei's earlier "wish to raise prices" and CFO George Huang's "not rule out" remarks.
Financial impact: 2% gross margin boost, $160B revenue target
Even at a conservative average 5% increase, the node-wide hike is expected to add over 2 percentage points to TSMC's 2026 gross margin. Full-year 2026 revenue is forecast to grow at least 30%, crossing $160 billion. In the second half, advanced-node wafers will contribute at least 80% of the expected $85 billion in revenue.
Compared with the near-extortionate price jumps by memory makers, TSMC's adjustment is more moderate — but clients have little choice. Apple CEO Tim Cook recently acknowledged that "price increases are unavoidable," signaling big customers are ready to pass costs to end consumers. The analyst humorously suggests the cost reshuffling might finally bring the long-rumored Apple "Red MacBook Neo" to market.