Buying a new phone is already painful enough, and it doesn’t seem like relief is coming anytime soon. Maybe you’ve noticed it yourself — brands nudging prices up a little each cycle, or quietly dropping features that used to come standard, all while charging the same amount. Well, there’s another reason to brace yourself: TSMC, the world’s largest contract chipmaker, is reportedly planning to raise the prices it charges clients for chip production starting in 2027.

Since TSMC manufactures processors for companies such as Apple, Qualcomm, MediaTek, Nvidia, Google, and others, this move could ultimately affect the prices of smartphones, tablets, laptops, and many other electronic devices. According to a report by Nikkei Asia, TSMC has informed its clients that it plans to raise chip manufacturing prices by 5% to 10% starting in 2027. The exact increase will depend on the client and the type of chip being produced.

For certain high-performance computing chips, clients placing orders beyond their initial forecasts might have to pay a surcharge of 10% to 15% on top of the standard price hike. This means that some advanced chips could end up costing considerably more than they do today.

The company is also expected to raise prices for older manufacturing technologies—including 12nm, 16nm, and 28nm chips—which remain widely used in smartphones and other consumer electronics. Negotiations with clients began in June and concluded in July; The new prices are expected to take effect in early 2027.

TSMC has not officially confirmed the mentioned price increase. Speaking to Nikkei Asia, the company stated: “TSMC does not comment on pricing. Our pricing strategy is strategic, not opportunistic. We will continue to collaborate closely with our customers and convey the value of our products to them.”

Why Your Next Phone Might Cost More

Timing is key, as smartphone prices have been rising for some time. In recent months, brands such as OnePlus, Xiaomi, Nothing, Realme, and Samsung have raised prices on various models, with increased memory costs being a primary reason. Apple also recently hiked prices for several MacBook and iPad models in India; some variants saw price increases of up to 100,000 rupees. CEO Tim Cook recently stated that price hikes have become inevitable due to higher component costs across the supply chain.

If TSMC also begins charging more for chip production, smartphone companies could face another significant rise in manufacturing costs. While brands might absorb some of the impact, it is likely that, in the long run, at least a portion of the additional cost will be passed on to consumers.

That’s also part of why it’s gotten so hard to find a genuinely well-equipped phone under ₹30,000 these days. Rewind a few years, and that budget got you the good stuff — AMOLED screens, decent mid-range chips, big batteries, cameras that actually held up. Now, phones in that same bracket tend to cut something: an older processor, a weaker camera sensor, a smaller battery, or features that quietly disappeared from the spec sheet.

TSMC puts it down to rising costs across the board — materials, equipment, and the expense of building new plants overseas, including its big Arizona expansion.

The company has also been investing heavily in advanced 2-nanometer chip production, a process requiring billions of dollars in capital.

TSMC Chairman C.C. Wei recently stated that the company is taking a measured approach to pricing rather than imposing sudden, steep increases. “We don’t suddenly raise prices, four or five times,” he said, adding that such measures would make it difficult for their customers to survive. “We earn our value and ensure that our profits—our gross margin—are sufficient to sustain our long-term expansion. This benefits both my customers and TSMC. That is our philosophy.”