diff --git a/pkgs/misc/vscode-extensions/terraform/default.nix b/pkgs/misc/vscode-extensions/terraform/default.nix
index 16a3c7477cdc..39dd6f90b80a 100644
--- a/pkgs/misc/vscode-extensions/terraform/default.nix
+++ b/pkgs/misc/vscode-extensions/terraform/default.nix
@@ -3,13 +3,13 @@ vscode-utils.buildVscodeMarketplaceExtension rec {
   mktplcRef = {
     name = "terraform";
     publisher = "hashicorp";
-    version = "2.6.0";
+    version = "2.7.0";
   };
 
   vsix = fetchurl {
     name = "${mktplcRef.publisher}-${mktplcRef.name}.zip";
     url = "https://github.com/hashicorp/vscode-terraform/releases/download/v${mktplcRef.version}/terraform-${mktplcRef.version}.vsix";
-    sha256 = "1zg90x2asl6gakd2w8fn4imllqgrzdb1dn3728s63blmml42a1xp";
+    sha256 = "0lpsng7rd88ppjybmypzw42czr6swwin5cyl78v36z3wjwqx26xp";
   };
 
   patches = [ ./fix-terraform-ls.patch ];
diff --git a/pkgs/misc/vscode-extensions/terraform/fix-terraform-ls.patch b/pkgs/misc/vscode-extensions/terraform/fix-terraform-ls.patch
index 84a626b17deb..3d5cc51fe2a4 100644
--- a/pkgs/misc/vscode-extensions/terraform/fix-terraform-ls.patch
+++ b/pkgs/misc/vscode-extensions/terraform/fix-terraform-ls.patch
@@ -1,8 +1,8 @@
 diff --git a/out/extension.js b/out/extension.js
-index 1de8aab..e2b3a3e 100644
+index 375048c..fa5eff0 100644
 --- a/out/extension.js
 +++ b/out/extension.js
-@@ -204,19 +204,7 @@ function pathToBinary() {
+@@ -209,20 +209,7 @@ function pathToBinary() {
          if (!_pathToBinaryPromise) {
              let command = vscodeUtils_1.config('terraform').get('languageServer.pathToBinary');
              if (!command) { // Skip install/upgrade if user has set custom binary path
@@ -13,6 +13,7 @@ index 1de8aab..e2b3a3e 100644
 -                }
 -                catch (err) {
 -                    vscode.window.showErrorMessage(err);
+-                    reporter.sendTelemetryException(err);
 -                    throw err;
 -                }
 -                finally {