Commentary: TSMC's pricing power stays intact as AI demand keeps fabs full

TSMC’s pricing power is shifting from cost-based to value-driven, underpinned by sustained AI chip demand keeping its advanced nodes fully loaded. Technically, the rising co-design complexity between sub-3nm logic and advanced packaging (e.g., CoWoS) locks in premium clients while marginalizing smaller AI ASIC players. Geopolitical compliance—particularly in its Arizona and Kumamoto fabs—has significantly inflated operational costs due to labor, energy, and export controls, making price adjustments a necessary pass-through mechanism. In response to Samsung and Intel luring AMD and Google with subsidized capacity, TSMC isn’t competing on price but on integration depth, using packaging as a strategic moat. Over the next 12–24 months, the industry will bifurcate: only TSMC can reliably deliver the yield and scale required for AI training chips, while second-tier foundries will struggle with fragmented standards in HBM stacking and chiplet interconnects, deepening the technology gap.