ranzware
The chip industry—as with many others, I’m sure—is, at least to onlookers like myself, in very uncertain waters of late, thanks to the United States’ upsy-downy-round-and-roundy ‘will he, won’t he?’ tariff position. The goal is ostensibly to have production shimmy on over to the US, but we’re now hearing rumour that even some chip production that is already in the US might have its prices raised.
This latest rumour comes from Economic Daily (via TrendForce), which reports that “market sources say that due to the high demand for production capacity and reflecting costs, TSMC is planning to increase the price of [its] 4nm foundry at its new US plant by as much as 30%” (machine translated).
This “new US plant” is TSMC’s Arizona fab, which is already making AMD Ryzen 9000-series and Nvidia Blackwell chips. It’s currently producing chips on a 4 nm (N4) process but is aiming at 3 nm, 2 nm, and following this, according to today’s TSMC earnings call (transcript here), 1.4 nm and 1.0 nm.
Currently it’s 4 nm, though, and a 30% price hike would be nothing for we gamers to scoff at, not in a market where Nvidia is pointing out there’s nothing it can do about potential chip tariffs, and it’s looking like said tariffs might actually be right around the corner.
In fact, if TSMC does raise prices, this might be a result of actual or threatened tariffs for two reasons. First, it could be a means to make up for losses caused by tariffs on TSMC’s larger non-US side of the business.
Second, there’s the simple fact that in economics, higher demand means higher prices, and if Trump launches tariffs at foreign semiconductors, then US semiconductors such as those coming out of TSMC Arizona will be in high demand.
During its earnings call today, TSMC didn’t have much to say about 4 nm prices, and it rarely does comment on customer prices. It did, however, say that some “margin dilutions” may “come from the cost [of] inflation as well as potential cost increases from the tariff policies”, and regarding this, “discussion with the customers are continuous.” In other words, cards close to the chest, as always.
I must say, the “as much as 30%” rumoured figure is strikingly close to the current 32% tariff on Taiwan, where TSMC—Taiwan Semiconductor Manufacturing Company—is, of course, based. That doesn’t apply to semiconductors, of course, but it looks like it, or something like it, soon might.
I’m also struck by the vision of Trump threatening TSMC with up to 100% tariffs if it didn’t build its plant in the US. Now I’m not saying this is what’s going on, but there would be a certain satisfaction to saying, ‘Sure, we’ll build our fabs in America… and then charge American companies up to 30% extra. You have your tariffs, we have our pricing.’
Still, TSMC has announced a $100 billion investment in the US and raising prices for no reason other than retaliation might not be the smartest business decision. If prices are raised, it’ll likely be for the reasons discussed earlier. Here’s hoping things simmer down long enough to land us with some actual RTX 50-series and RX 9000-series stocks.
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Kurt Indovina
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