Following Samsung, will TSMC raise prices by 10-15% across all process nodes?

The strong demand for AI chips is reshaping the pricing landscape of the global semiconductor foundry market. Following Samsung Electronics' lead in raising foundry service prices, the market now expects industry leader TSMC to follow suit, planning to implement a 10% to 15% price increase across all process nodes. This marks the start of a new profit expansion cycle for leading chip manufacturers.

Capacity shortages are the direct catalyst for this round of price hikes. According to reports from TrendForce and Nomura Securities, TSMC completed a new round of price negotiations with customers in mid-2024, implementing up to a 15% price increase for certain 3nm (N3) processes facing supply shortages in the second half of the year. By early 2027 at the latest, TSMC also plans to further raise prices for advanced processes such as N2, N3, and N5 by an additional 5% to 10%.

The expectation of price increases quickly spread to the capital markets, driving Wall Street institutions to significantly raise TSMC’s valuation. Institutions such as Citi, Bank of America, and Macquarie have all raised their target price for TSMC, with some even as high as NT$4,200. There is a broad consensus that the strong demand for AI and enhanced pricing power will directly boost TSMC and its supply chain’s long-term profitability.

This restoration of pricing power started with Samsung. Wallstreetcn article previously reported, citing Reuters, that Samsung had raised the foundry prices for its 4nm and 5nm processes by 10% to 15% as of July, with mature 8nm process prices also increasing by nearly 10%. Due to TSMC's capacity overflow, Samsung's long-loss-making foundry business has reached a turning point.

Capacity Crisis: TSMC Raises Foundry Quotations Across the Board

TSMC's advanced process capacity is currently fully loaded. Market data shows that its N2 and N3 process chips are almost entirely booked by Apple and Nvidia. To meet demand for the next-generation Nova Lake desktop processors in early 2027, competitor Intel, in addition to using its own 18A process, will also expand purchasing of N2X process chips from TSMC, further intensifying the capacity crunch.

Against the backdrop of tight supply for advanced capacity, TSMC’s price hike strategy is spreading to all product lines. Market research reports state that, in addition to a significant increase for N3 processes, mature process chips like N12, N16, and N28, which have not seen adjustment for three consecutive years, will also receive hikes, with some up to 10%. This means TSMC will gradually and comprehensively raise the price of all its foundry chips starting from the second half of this year.

According to a report from Citi Securities, thanks to strong demand from global tech giants for AI chips, TSMC’s advanced process capacity utilization will remain at a high level. Specifically, the rigid demand for N2 and N3 chips will support the steady rise of foundry prices through 2027. Notably, the starting price for each N2 wafer at TSMC is already as high as $30,000, a 10% to 20% premium over N3.

Capital Expenditure Hits Record Highs, Wall Street Raises Profit Expectations Sharply

To widen the technological and scale gap with Samsung and Intel, TSMC is accelerating its capacity expansion.

According to CLSA's report, TSMC's capital expenditure is expected to reach $80 billion in 2027, expanding further to $90 billion in 2028. This year, TSMC has already increased its capital spending to a record-high range of $52 billion to $56 billion, and in July announced an increase in US investment to $265 billion, with plans to build multiple wafer and advanced packaging plants in Arizona.

Strong pricing power and capacity expansion have led major foreign institutions to unanimously view its profit outlook favorably. Bank of America, Goldman Sachs, and Citi have reached a general consensus on TSMC's earnings per share (EPS) for 2026–2028, predicting that EPS will surpass NT$100 in 2026 and reach NT$170–200 in 2028. All institutions have issued a “Buy” or “Outperform” rating, with target price ranges centered between NT$3,700 and NT$3,800.

Optimism in capital markets has also spread to the industry chain. Although TSMC's share price recently dropped to NT$2,375 due to a pullback in the Philadelphia Semiconductor Index, institutions believe that with revenue hitting new highs and the expectation of a comprehensive 10% to 15% price adjustment, now is a great opportunity to accumulate shares on dips.

Meanwhile, TSMC’s expansion plans have already driven double-digit revenue growth for semiconductor equipment, materials, and cleanroom suppliers in the first seven months of this year, with industry visibility now extending beyond 2027.

Samsung Initiates First Round of Price Increases: Both Advanced and Mature Processes Rise

Wallstreetcn article reported, citing Reuters, that Samsung Electronics implemented price hikes of up to 15% for some new advanced process foundry service orders starting in July.

Specifically, the price increase for 4nm process (SF4) chips for clients in mainland China and the United States is 10% to 15%, the 5nm SF5 process wafer price also increased by 10% to 15%, and the 8nm process price rose by nearly 10%.

From a market structure perspective, Samsung's price hike carries important signaling significance. Research firm Counterpoint data shows that in Q1 2026, TSMC's share of the global foundry revenue market will be about 73%, Samsung about 7%, and SMIC about 5%. Samsung’s foundry division has been operating at a loss since 2022 and has not been able to effectively narrow the gap with TSMC.

Wallstreetcn article noted that Samsung's foundry business customer base is rapidly expanding, further strengthening its pricing power. Tesla and Apple both signed chip manufacturing agreements with Samsung last year; in July, Samsung announced a cooperation with Broadcom for AI chip production; Nvidia CEO Jensen Huang stated in March that Samsung will provide foundry service for its new AI inference processors. In addition, Google is currently negotiating with Samsung for chip production using the SF4 process.

Samsung expects advanced processes will account for more than half of its foundry revenue this year, with AI and high-performance computing applications exceeding 30%, up from 15% to 20% at the end of 2025. The SF4 production line at Samsung’s Pyeongtaek plant in South Korea has been running at full capacity since the end of last year, producing logic chips for clients like Qualcomm, while also building base chips for Samsung’s own multi-layer High Bandwidth Memory (HBM) chips.