World’s top chipmaker flags rising costs of electronic chips, debunks 'AI bubble' theory

TSMC (Taiwan Semiconductor Manufacturing Company) , the world’s largest contract chipmaker, has indicated that rising costs could eventually be reflected in pricing, while dismissing concerns that the artificial intelligence (AI) boom is a speculative bubble.

In a rare interview with the BBC, TSMC Chief Financial Officer Wendell Huang said inflation had increased the company’s operating costs but stressed that any pricing adjustments would be measured.

“We reflect our value,” Huang said, pointing to the company’s technological leadership and manufacturing capabilities. He added that TSMC was not considering dramatic price increases.

The comments come as surging demand for AI chips has boosted TSMC’s revenues and market value. The company manufactures advanced semiconductors designed by major technology firms including Nvidia, Apple and AMD.

TSMC Chairman and Chief Executive Officer C.C. Wei separately told shareholders that he would like to raise prices, noting that competitors had already done so.

The company is expanding manufacturing capacity in the United States, Germany and Japan alongside continued investment in Taiwan. However, Huang rejected suggestions that the expansion was driven by geopolitical pressure from either Washington or Beijing.

He said overseas facilities were being built in response to customer demand rather than government requests.

At the same time, Huang maintained that Taiwan would remain the centre of the company’s most advanced semiconductor production. Replicating Taiwan’s manufacturing ecosystem elsewhere could take five to ten years or even longer, he said.

TSMC has committed around $165 billion towards its operations in Arizona as part of a broader push to diversify production.

Addressing concerns over the sustainability of the AI-driven investment surge, Huang said the company remained confident about long-term demand.

“Our conviction in this AI megatrend is very strong,” he said, adding that major technology companies investing in AI infrastructure possess significant financial resources and are expected to continue spending.

Global technology stocks have recently come under pressure amid concerns about stretched valuations and whether the pace of AI-related investment can be maintained. However, TSMC believes demand for advanced chips will continue to support growth in the sector.

The company remains a critical supplier to the global technology industry and sits at the centre of efforts by governments and businesses to secure semiconductor supply chains amid growing strategic competition between the United States and China.