The world’s largest chipmaker has warned that inflation is driving up its costs and did not rule out passing them on to customers – a move that could ultimately raise the price of electronics.
In a rare interview at the company’s headquarters in Hsinchu, Taiwan, Taiwan Semiconductor Manufacturing Company’s (TSMC) chief financial officer, Wendell Huang, told the BBC that inflation had increased the cost of doing business. While he stopped short of committing to price rises, he said: “Inflation, yes, did cause [our] costs to increase.”
“TSMC warns inflation is raising costs and does not rule out price rises, which could hit consumers.”
TSMC makes the most advanced chips for companies such as Nvidia, AMD and Apple. Any price increase by the firm would ripple through AI infrastructure and, over time, potentially to the electronic devices consumers buy.
But Huang dismissed the idea of sudden, large increases. “We reflect our value,” he said, pointing to the company’s “technology leadership” and “manufacturing excellence”. Earlier in the day, TSMC’s chairman and chief executive, CC Wei, told shareholders he would “like” to raise prices, as its competitors have done.
Huang also rejected claims that the AI boom is a bubble, and pushed back against the suggestion that TSMC’s global expansion – with new plants in the US, Germany, Japan and Taiwan itself – was a response to geopolitical pressure. “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.
Nonetheless, he was clear that the most cutting-edge production will remain in Taiwan. Moving the entire manufacturing ecosystem to the US, he said, would take “five or 10 years, or even longer” – a timeline that directly challenges American industrial policy, which has pushed TSMC to commit $165bn to its Arizona operations.
The chip industry sits at the centre of escalating US-China trade tensions. Taiwan, a self-governed island that China claims, produces the majority of the world’s most advanced chips. Chinese President Xi Jinping recently warned US President Donald Trump that mishandling Taiwan could put the relationship in an “extremely dangerous situation”.
TSMC’s annual shareholder meeting, held at the Hsinchu Science Park, underscored the company’s central role in global technology. As Huang spoke, the question of what customers will pay for devices powered by TSMC’s chips remained open – but the direction of travel was clear.