The world’s largest chipmaker has told the BBC that inflation is pushing up the cost of doing business, and did not rule out price rises – a move that could ripple through to the cost of AI infrastructure and eventually the prices customers pay for their electronic devices.
Taiwan Semiconductor Manufacturing Company (TSMC) makes the most advanced chips designed by companies such as Nvidia, AMD and Apple. Its chief financial officer, Wendell Huang, said in a rare interview at the company’s headquarters in Taiwan: “Inflation, yes, did cause [our] costs to increase.”
“TSMC warns inflation is raising costs and does not rule out price rises, which could hit consumer electronics.”
But Huang stopped short of committing to sudden steep rises. “We reflect our value,” he said, pointing to its “technology leadership” and “manufacturing excellence”. He added that the firm would not introduce “fourfold, fivefold” price increases.
Earlier in the day, TSMC’s chairman and chief executive CC Wei told shareholders that he would “like” to raise prices, as its competitors have done.
The global chip industry and TSMC sit at the centre of escalating US-China trade tensions, with Washington pressing leading chipmakers to expand production in the US to secure critical supply chains. Taiwan, the US ally and self-governed island that Beijing claims, produces the majority of the world’s most advanced chips – the tiny processors that sit inside smartphones, laptops and AI data centres.
Chinese President Xi Jinping warned at a recent summit with US President Donald Trump that mishandling Taiwan could put the relationship between the two superpowers in an “extremely dangerous situation”.
TSMC is expanding manufacturing in the US, Germany and Japan as well as in Taiwan itself, but Huang pushed back against the idea that this was a response to pressure from either Washington or Beijing. “We go out of Taiwan to build capacity based on customers’ demand. The customers want us to go there. It’s not the request of government,” he said.
However, on the question of where the world’s most advanced chips will be made, Huang was clear: the most cutting-edge production will remain in Taiwan. Moving the manufacturing ecosystem to the US, he said, would take “five or 10 years, or even longer” – a timeline that directly challenges the ambitions of US industrial policy, which has pushed TSMC to commit $165bn to its Arizona operations.
Huang also denied that the AI boom was a bubble. The BBC travelled to Hsinchu Science Park, a dense cluster of fabrication plants south of Taipei, for TSMC’s annual shareholder meeting and for the rare interview.