Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturing) corporations, is reportedly considering increasing prices for advanced processes in response to U.S. President Trump's tariff threats.
According to local media such as the Taiwan Economic Daily on the 5th, TSMC is expected to raise prices for advanced processes by at least 15% as a countermeasure to Trump's tariff threats. While a price increase of 5% to 10% was initially anticipated, the likelihood of Trump's tariff policy becoming a reality has increased, prompting TSMC to analyze the possibility of a larger price hike. TSMC is expected to apply this price increase to processes below 7 NANO (nanometers, 1 billionth of a meter).
Shortly after taking office, President Trump announced plans to impose a 10% tariff on China and a 25% tariff on Canada and Mexico. Although Canada and Mexico strongly opposed this and decided to postpone the tariff imposition for one month, tensions have risen not only with the competitor China but also among allies. TSMC is also responding by holding its first board meeting in the United States and considering establishing additional factories.
TSMC's price increase policy is ultimately seen as a strategy to pass some of the burden onto its largest clients, the U.S. big tech corporations. The key customers of TSMC's processes below 7 NANO include U.S. big tech corporations such as Apple, Qualcomm, NVIDIA, and AMD. Given that TSMC has established a dominant position in the advanced process sector, its clients lack viable alternatives, making them likely to accept price increases. The Taiwan Economic Daily noted, "TSMC currently holds strong price-setting power in the market and occupies a position from which it can pass costs onto customers."
Kim Yang-pyeong, a senior researcher at the Korea Institute for Industrial Economics and Trade, noted, "In the case of general-purpose products, there are many substitutes, so if the U.S. imposes tariffs, supplying corporations will inevitably suffer losses. However, since there are no clear alternatives for TSMC's advanced processes, they are likely to raise prices if tariffs are imposed. In this case, it is obvious that U.S. corporations will also face expense burdens, and the U.S. government will consider the situation from various perspectives before making a decision."
Like TSMC, domestic corporations such as Samsung Electronics and SK hynix are also reportedly closely monitoring the impact of the tariff imposition. A semiconductor industry official stated, "Since the possibility of the imposition of tariffs on trade partners has been somewhat foreseeable since the Trump administration took power, it will be difficult to raise prices for general-purpose memory products due to a surplus in supply. However, there are no alternative corporations for advanced memory products other than Samsung Electronics, SK hynix, and Micron. The production capacity of Micron alone has limits, so if tariffs are imposed, Samsung Electronics and SK hynix may choose to raise prices specifically for advanced memory products."