www.eetimes.com, Oct. 01, 2025 –
The global semiconductor industry is undergoing a profound economic transformation, one anchored by Taiwan Semiconductor Manufacturing Company (TSMC) that spells the end of an era defined by predictably declining costs of transistors.
At the center of this structural shift is TSMC’s decision to implement unprecedented price hikes for its most advanced logic chips, a move necessitated by astronomical capital expenditures, geopolitical mandates, and the sheer, unyielding physics of manufacturing at the angstrom scale.
TSMC, the world’s undisputed leader in advanced logic manufacturing and the holder of a commanding 70.2% share of all foundry revenue as of the second quarter of 2025, is leveraging its technological supremacy to fund the next generation of innovation. This strategy permanently raises the cost basis for the foundational components of the entire digital economy.
For decades, Moore’s Law promised that devices would become exponentially more powerful while simultaneously becoming more affordable due to declining cost-per-transistor. That principle has now reached an inflection point.
Soon, according to media reports, TSMC will implement price increases of 5-10% for its advanced nodes below 5nm starting in 2026. However, the most strategically significant adjustment will be for the generational leap to the 2-nanometer (2nm) node.
Wafers produced on the 2nm node would see prices surge by over 50% compared to their predecessors. The current cost of a 300mm wafer on the 3nm process is approximately $20,000. A 50% increase will push the price of a single 2nm wafer to an unprecedented $30,000 or more.
This dramatic escalation means that the cost of manufacturing is now rising faster than the economic benefits of density scaling alone can offset.
For the first time in a major node transition, the cost per transistor will rise. This structural shift signals to the entire industry that access to the pinnacle of semiconductor technology is no longer a commodity but a premium, non-negotiable service.
A primary catalyst for TSMC’s rising cost structure is the immense capital expenditure required for global diversification, a strategic pivot heavily influenced by geopolitical pressures. The company’s total planned expenditure in its Arizona, USA facilities has swelled to an astonishing $165 billion, representing the largest single foreign direct investment in U.S. history.
These overseas facilities, however, operate at a significant cost premium compared to TSMC’s optimized fabs in Taiwan.
AMD CEO Lisa Su has publicly confirmed that chips produced at the Arizona fab cost between 5% and 20% more than those made at their Taiwanese counterparts. Other industry reports suggest this premium could be as high as 30% for 4nm production in Arizona.