TSMC plans 2027 chip price increase, report says: Here's why your next smartphone may become more expensive

Buying a new smartphone has already become more expensive, and the trend may continue. According to a Nikkei Asia report, Taiwan Semiconductor Manufacturing Company (TSMC) is planning to increase the prices it charges customers for making chips from 2027. The reported increase of 5 to 10 per cent, depending on the customer and chip type, could eventually affect the prices of products from companies such as Apple, Qualcomm, MediaTek, Google, Nvidia and many others. While TSMC has not confirmed the reported price hike, it said its pricing strategy is "strategic, not opportunistic" and is aimed at reflecting the value it delivers to customers.

Why does this matter for smartphone buyers?

TSMC is the world's largest contract chip manufacturer. It produces processors used in millions of smartphones, tablets, laptops and AI devices every year. If the cost of manufacturing chips rises, smartphone brands will also face higher production costs. Although companies may absorb some of the increase, analysts expect at least part of it to be passed on to consumers through higher retail prices. According to the report, customers placing additional orders for high-performance AI chips beyond their original forecasts could even pay an extra 10 to 15 per cent premium, making advanced processors significantly more expensive.

Why are electronics becoming costlier?

The reported move comes as the consumer electronics industry is already dealing with rising component costs. Over the past year, brands including Samsung, Xiaomi, OnePlus, Nothing and Realme have increased prices across several smartphone models. Apple has also raised prices on some MacBook and iPad models in India, with CEO Tim Cook recently saying higher component costs have made price increases difficult to avoid.

Consumers are already feeling the impact. A few years ago, smartphones priced below Rs 30,000 often offered flagship-like displays, fast processors and premium cameras. Today, many devices in the same segment make compromises on performance, cameras or battery capacity to keep prices competitive.

Why is TSMC increasing prices?

According to the report, TSMC needs additional revenue to fund massive investments in advanced semiconductor manufacturing. The company is expanding production overseas, including major facilities in Arizona, while investing billions of dollars in next-generation 2nm chip technology.

TSMC Chairman C.C. Wei recently said the company prefers gradual price increases rather than sudden, steep hikes that could hurt customers. If the reported pricing changes take effect in 2027, they could influence not only smartphones but also AI servers, laptops, gaming devices and other products that depend on advanced chips. As artificial intelligence drives demand for more powerful processors, the cost of making those chips is becoming one of the biggest factors shaping the future price of consumer technology.