TSMC CEO signals openness to price increases as AI demand strains production capacity
Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, is confident in its growth trajectory over the next few years, riding demand from artificial intelligence applications. CEO C.C. Wei said Thursday that customers remain positive on AI prospects, though the company is monitoring rising component costs.
Wei, speaking at TSMC's annual shareholders' meeting in Hsinchu, said the company would like to raise chip prices but won't follow the aggressive pricing tactics of memory chip makers. "I'd like to do that ... we still need to make money," Wei said. "We don't want to suddenly raise prices like memory companies do. That's not sustainable."
TSMC is working at maximum capacity to meet demand. "We continue to see increasing adoption of AI models across consumer, enterprise and sovereign AI applications," Wei said. "This trend is driving demand for greater computing power, which in turn supports strong demand for advanced semiconductor chips."
U.S. production will take years to meet demand
The company is investing $165 billion to build factories in Arizona but said it will take "a very long time" to fully satisfy American customers' needs with U.S.-based production. Wei said TSMC's two Arizona land parcels should be sufficient for the next decade.
Taiwan remains TSMC's most efficient manufacturing location and home to its core research and development operations. The island plays a crucial role in the global AI supply chain for companies including Nvidia and Apple.
Employee compensation rises sharply
TSMC increased employee profit sharing by roughly 30% annually in both 2024 and 2025, with Wei saying the company expects another 30% increase in 2026. "We believe this represents strong compensation for our employees," he said, adding there is no ceiling on the annual growth rate.
The move reflects growing pressure on chip manufacturers to share gains from the AI boom. Samsung Electronics in South Korea recently negotiated a union deal to avert a strike over worker pay.
Advanced equipment remains too costly
Wei said TSMC has purchased High-NA EUV machines from Dutch equipment maker ASML, which can cost up to $400 million each, but is conducting research rather than deploying them in production. "We do not currently need it for production because the cost is still somewhat high," he said. "Once the economics make sense, we will bring it into production."
TSMC's stock price climbed to T$2,425 by Wednesday, up from T$950 a year earlier. Shares fell more than 1% on Thursday, tracking the broader market index.
Wei identified autonomous vehicles as a long-term growth driver for the company. He also noted that TSMC faces political risk as China increases military pressure on Taiwan, which Beijing claims as its own territory.
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