Taiwan Semiconductor Manufacturing Company, the world’s largest chip producer, told the BBC that inflation is raising its cost of doing business and that price increases, while not imminent, remain a possibility. In a rare interview at the company’s Hsinchu headquarters, chief financial officer Wendell Huang said the firm would “reflect our value” and would not engage in sudden, multi‑fold price hikes. He pointed to the company’s “technology leadership” and “manufacturing excellence” as justification for keeping prices stable for advanced wafers that power AI, smartphones, laptops and other devices.
The cost pressure is linked to a surge in demand for AI chips. TSMC is expanding manufacturing in the United States, Germany and Japan, but Huang insisted the expansion is in response to customer demand rather than government directives. He stressed that the most cutting‑edge production will remain headquartered in Taiwan, pointing out that shifting the entire ecosystem overseas would take five to ten years or longer.
Geopolitical tensions between China and the United States frame the backdrop for the chip industry’s global expansion. China’s president warned that mishandling Taiwan could jeopardise relationships between the two powers, while Washington has encouraged U.S. chipmakers to build more production capacity domestically to secure the supply chain. TSMC’s expansion efforts are seen as part of that broader strategy, though the company’s narrative is that it operates on customer demand.
Behind the headlines, TSMC’s CFO denied that the AI boom is a bubble. He said the company’s confidence in the AI megatrend is strong and that the “hyper‑scalers” – the big cloud‑service providers – are financially well positioned to keep investing. He noted the pressure from markets, with tech shares in Asia falling after a run of gains and investors debating whether the enormous spending on AI infrastructure can be sustained.
The company’s shares have risen sharply over the past year as demand for AI chips accelerated, and the CFO emphasised that the firm is “doing everything we can, wherever we can, and however we can” to meet that demand.
In summary, while TSMC remains cautious about price hikes amid rising inflation, it maintains a firm belief in the longevity of the AI industry and underscores the importance of customer-led expansion in a complex geopolitical landscape.
