The world’s largest chipmaker has told the BBC it cannot rule out price increases as inflation drives up the cost of doing business – a move that could ultimately push up the price of smartphones, laptops and the artificial intelligence infrastructure powering the tech industry’s next wave.
Taiwan Semiconductor Manufacturing Company (TSMC) produces the most advanced chips for clients including Nvidia, AMD and Apple. Any rise in its prices would ripple through the global electronics supply chain. But the firm’s chief financial officer, Wendell Huang, sought to calm fears of sudden shock increases. “We reflect our value,” he said, pointing to TSMC’s “technology leadership” and “manufacturing excellence”. He added that the company would not introduce “fourfold, fivefold” price rises.
“TSMC warns price rises possible as inflation hits costs, potentially raising prices for electronics and AI infrastructure.”
The warning came in a rare interview at the company’s headquarters in Hsinchu Science Park, south of Taipei, where the BBC attended TSMC’s annual shareholder meeting. Huang also pushed back against claims that the AI boom is a bubble, insisting the company’s expansion into the US, Germany and Japan is driven by customer demand, not pressure from Washington or Beijing.
Yet the geopolitics of chips loom large. Taiwan, the self-governed island that Beijing claims, produces the vast majority of the world’s most advanced semiconductors. Chinese President Xi Jinping recently warned US President Donald Trump that mishandling the Taiwan issue could put the relationship between the two superpowers in an “extremely dangerous situation”. Washington has pressed TSMC to build factories in America to secure critical supply chains, with the company committing $165bn to its Arizona operations.
But Huang made 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 the ambitions of US industrial policy.
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. While Huang stopped short of a firm commitment, he acknowledged the pressure: “Inflation, yes, did cause [our] costs to increase.”