Samsung Raises Chip Manufacturing Prices For New Orders By 15%

Samsung Electronics has announced a price increase of up to 15% for new orders of manufacturing chips, according to sources familiar with the situation. This decision comes as the demand for AI chips continues to outpace the already limited supply of the component. Chinese customers have been the most enthusiastic about Samsung's new pricing, although the company has struggled to fulfill all of its orders, including those from US customers.

Samsung is also setting aside some of its own chip capacity for its own production line, which is not the case with its US counterpart.

The company hopes that the price hikes will enable its foundry business to become profitable and reduce the gap between Samsung and its Taiwanese rival, TSMC. This is not the first time Samsung has raised prices for chip manufacturing. In July, the company raised the price of its 4nm process, known internally as SF4, from a 10% increase to a 15% increase.

TSMC made a similar adjustment, increasing its prices by approximately 5%. Currently, Samsung's chip production accounts for only 7% of the global foundry revenue, while TSMC captures more than 70% of the world's chip demand.

The ongoing AI boom and the increasing demand for AI chips are expected to persist for a considerable period. Additionally, the memory chip shortage, which is also a consequence of the chip shortage, is anticipated to endure beyond 2030. One consumer brand that may be impacted by Samsung's price hike is Nintendo, as the gaming company utilizes Samsung's chips in the manufacturing of its upcoming Switch 2 handheld console.