TSMC is raising prices in the US, but customers are still buying

Summary: TSMC is raising the prices of its chipsets manufactured in the US by 30%. However, despite the price increase, reports suggest that many customers are willing to pay.

Trump’s announcement of tariffs has left many markets confused about what to do next. His unpredictability and penchant for retracting his statements mean that businesses are in limbo. Do they wait for a final announcement, or do they take more proactive measures? In the case of TSMC, it is the latter.

30% increase in price

According to a report from DigiTimes, TSMC is raising the prices of its US-based foundries’ quotations by 30%. It sounds like a lot because it is, but interestingly enough, customers are still flocking to TSMC all the same. This is also although TSMC’s US operations do not house its most advanced plants.

However, it’s not hard to see why companies are still willing to pay the higher prices. TSMC is the world’s largest semiconductor manufacturer. Its foundries are home to some of the latest semiconductor production technologies. This explains why big brands such as Apple, Qualcomm, and NVIDIA source from TSMC.

It is unclear why TSMC is raising its prices. Trump’s tariffs will apply to pretty much every country around the world. The only question is, how much? Trump had also previously suggested that smartphones and computers would be exempt from tariffs but later clarified that they could fall under a general semiconductor tariff plan.

This could be one of the reasons why TSMC has raised its prices. It is doing so in anticipation that it will face tariffs for importing certain components into the US. Another likely scenario is simply greed. The company knows that it is the largest semiconductor manufacturer in the world, and its rivals either do not have the technology or the scale to keep up with demand. This means TSMC can freely raise its prices, and customers will have no choice but to pay.

TSMC scaling up US operations

That being said, TSMC is reportedly planning to build more advanced facilities in the US. However, this could take a while to build and get up to scale. In the meantime, we’re not sure which of TSMC’s customers are willing to pay the extra 30% in price just to have their chipsets manufactured in the US.

It also stands to reason that these companies won’t be able to absorb the price increase either, which means more expensive products overall.

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