Your next smartphone could be pricier and TSMC is 1 big reason why
Buying a new smartphone is already becoming more expensive, and things may not get better anytime soon. If you have noticed brands quietly increasing prices or offering fewer premium features at the same price, there is another reason that could make future phones cost even more. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, is reportedly planning to increase the prices it charges customers for making chips from 2027.
Since TSMC manufactures processors for companies like Apple, Qualcomm, MediaTek, Nvidia, Google and several others, the move could eventually affect the price of smartphones, tablets, laptops and many other electronic devices. According to a Nikkei Asia report, TSMC has informed customers that it plans to raise chip manufacturing prices by around 5 to 10 percent from 2027. The exact increase will depend on the customer and the type of chip being produced.
For some high-performance computing chips, customers placing additional orders beyond their original forecasts may even have to pay an extra premium of 10 to 15 percent on top of the regular increase. That means some advanced chips could end up costing significantly more than they do today.
The company is also expected to increase prices for older manufacturing technologies, including 12nm, 16nm and 28nm chips, which are still widely used in smartphones and other consumer electronics. The reported negotiations with customers started in June and were completed in July, with the revised pricing expected to take effect at the beginning of 2027.
TSMC has not officially confirmed the reported price hike. In a statement to Nikkei Asia, the company said, “TSMC does not comment on pricing. Our pricing strategy is strategic, not opportunistic. We will continue to work closely with customers and sell our value to them.”
Why your next phone may cost more
The timing is important because smartphone prices have already been climbing. Over the past few months, brands including OnePlus, Xiaomi, Nothing, Realme and Samsung have increased the prices of several smartphones, with rising memory costs being one of the major reasons. Apple also recently raised the prices of several MacBook and iPad models in India, with some variants becoming as much as Rs 1 lakh more expensive. CEO Tim Cook recently said that price increases have become unavoidable because of higher component costs across the supply chain.
If TSMC also starts charging more for chip production, smartphone companies could face another major increase in manufacturing costs. While brands may absorb some of the impact, it is likely that at least part of the additional cost will eventually be passed on to consumers.
This also explains why getting a feature-packed smartphone under Rs 30,000 has become increasingly difficult. A few years ago, buyers could expect premium features such as AMOLED displays, powerful mid-range processors, large batteries and capable camera systems in this segment. Today, many phones in the same price range come with compromises, whether it is an older chipset, lower-resolution camera sensors, smaller batteries or fewer premium features.
TSMC says the planned increase is meant to offset rising costs for materials, manufacturing equipment and building new overseas chip plants, including its massive expansion in Arizona. The company has also been investing heavily in advanced 2nm chip production, which requires billions of dollars in capital.
TSMC Chairman C.C. Wei recently said the company is taking a measured approach to pricing instead of imposing sudden steep increases. “We don’t suddenly increase our price … four or five times,” he said, adding that such moves would make it difficult for customers to survive. “We earn our value and we make sure that our profit, our gross margin is enough for our long-term sustaining expansion. That’s to the benefit of my customers and TSMC also. That’s our philosophy.”
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