The big picture: As President Donald Trump enacts long-promised tariffs against Chinese products, duties against other international goods, including semiconductors from Taiwan, loom on the horizon. Recent reports indicate that TSMC plans to respond by passing costs onto consumers, likely dragging end products further away from the Moore's Law curve.
Commercial Times reports that TSMC might increase the prices of its most advanced semiconductor wafers by up to 15 percent this year. Rising production costs and potential US tariffs are the primary factors behind the prediction. Previously, analysts expected wafer prices to rise by five to 10 percent in 2025. The new forecast indicates that incoming tariffs may accelerate the increasing costs and blunted performance gains of recent products.
Taiwan's silicon giant is expected to raise prices for smaller nodes starting at 7nm. That relatively mature but still advanced node costs around $10,000 per wafer. Apple, TSMC's most privileged customer, currently pays $18,000 per 3nm wafter. Depending on the buyer, tariffs could increase 3nm prices to roughly $20,000 to $23,000 per wafer.
More expensive wafers compared to offerings from the previous decade have already resulted in pricier devices with less impressive performance improvements. Recent iPhone chips don't leapfrog their immediate predecessors as dramatically as before, and Nvidia's newly released RTX 50 series is one of the most disappointing graphics card generations in recent memory.
Analyzing specs across historical GPU lineups reveals a solid case for blaming the lukewarm performance uplifts on Nvidia's greed. However, rising semiconductor costs and the fact that RTX 50 uses the same node as RTX 40 also play a role.
While semiconductors from companies like TSMC and Samsung aren't facing tariffs yet, President Trump's recently enacted 10 percent tariff on Chinese products still impacts the products they power. Chinese companies still assemble crucial components and provide rare-earth metals for many modern electronics.
An additional round of tariffs is projected for February 18, affecting TSMC and other companies providing computer chips, aluminum, copper, and other items. The President believes the tariffs will convince foreign companies to build manufacturing plants in the US. However, establishing a new semiconductor fab takes several years, so any meaningful response from TSMC wouldn't bear fruit within Trump's term.
To that end, TSMC plans to begin manufacturing 4nm chips in Arizona this year, with more advanced nodes like 3nm and 2nm following through the rest of the decade. However, these semiconductors will lag behind the most advanced nodes produced in Taiwan. Recent rumors suggest that TSMC will construct a 1nm Giga-Fab in Tainan City, Taiwan.
TSMC prepares to pass tariffs costs, could increase semiconductor prices by 15 percent
