TSMC, the world's dominant semiconductor manufacturer, is raising prices on advanced chips by 5–10%, a move that will likely expand its already-massive profit margins above analyst expectations. Since advanced nodes generate 74% of TSMC's revenue and the company already posted a 65% year-over-year earnings-per-share jump in Q1, stronger pricing could drive even bigger earnings surprises in 2026.
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Taiwan Semiconductor Manufacturing (TSMC), which controls nearly three-fourths of the global foundry market, is reportedly raising prices on its advanced chipmaking nodes by 5% to 10%. Advanced nodes (7-nanometer or smaller) account for 74% of TSMC's total revenue.
Why it matters
The price increases are expected to strengthen TSMC's already-strong profitability. The company's net profit margin rose to 50.5% in Q1, up 7.4 percentage points year over year. With these price hikes taking effect, margins could expand further—potentially helping TSMC deliver earnings growth above what analysts currently project.
What to watch
Analysts project a 48% increase in TSMC's earnings per share in 2026 to $15.80, but the company reported a 65% increase in Q1 to $3.49. If stronger pricing helps TSMC sustain above-forecast earnings growth this year, the stock—which has already gained 39% in 2026—could see further upside.
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