Samsung Hikes Chip Manufacturing Prices 15%

What Is Samsung's Chip Manufacturing Price Increase?

Samsung Electronics (Samsung) is raising the price of manufacturing new chips by up to 15% for new orders. This price adjustment applies to Samsung's foundry services, which produce semiconductor chips for external clients. The increase is a direct response to surging demand for AI chips, which has intensified the global supply shortage.

Samsung is a major South Korean electronics and semiconductor manufacturer. This move affects the broader tech hardware industry, as it increases costs for companies relying on Samsung's fabrication plants. The company aims to leverage this price hike to improve profitability in its foundry business and narrow the competitive gap with its Taiwan-based rival, TSMC.

Key Facts

How Much Did Samsung Raise Chip Prices and Why?

Samsung is raising the price of manufacturing new chips by up to 15%. According to sources close to Reuters, the price increase is driven by demand for AI chips, which is "chip away" at an already constricted component supply. This is reported as one of Samsung's steepest price increases to date.

The demand landscape is uneven. Chinese customers are reportedly the strongest for Samsung and have been more willing to accept the price hike. Meanwhile, Samsung has reportedly been unable to meet all orders as it prioritizes servicing its US customers and reserves a portion of its own chip capacity for its own production line. **Samsung has raised chip manufacturing prices by up to 15% for new orders due to the escalating AI chip demand, with Chinese customers showing the most willingness to accept the hike.**

How Does This Price Hike Impact Samsung's Foundry Business?

This price increase is a strategic move by Samsung to improve its financial standing in the semiconductor manufacturing sector. The company hopes the price hikes will help its foundry business turn a profit. Samsung's foundry business has been trailing its primary competitor.

The manufacturing gap between Samsung and TSMC is substantial. Chip production for Samsung stands at 7% of the global foundry revenue, while TSMC accounts for more than 70% of the world’s chip demand. The company is aiming to narrow this gap through these strategic price adjustments.

Unlike the US side, however, Chinese customers are the one who have been more willing to accept Samsung’s latest and, in retrospect, its steepest price increase.

Lowyat.NET report on Samsung pricing

**The price hike is a strategic attempt to increase profitability in Samsung's foundry business, which currently holds only 7% of the global foundry revenue compared to TSMC's over 70%.**

How Does This Compare to TSMC's Pricing?

Samsung has raised prices for its 4nm process, known internally as SF4, previously. In July, the price was raised from 10% to 15%. Its rival TSMC also raised prices, but more or less in the same 5% vein. This indicates a competitive dynamic where both major players are adjusting pricing due to market conditions.

The manufacturing gap between Samsung and Samsung is described as a "massive chasm" or "deep ocean". The 7% vs 70% revenue share highlights the significant dominance TSMC holds. The new 15% increase is seen as a more aggressive move compared to the previous adjustments.

**Samsung's latest 15% price hike follows a previous 10% to 15% increase on its 4nm process in July, while competitor TSMC raised prices by a more conservative 5%.**

Who Will Be Affected by the Chip Price Hike?

Companies that rely on Samsung for chip manufacturing will be affected by the price increase. One consumer brand that may likely be affected is Nintendo. The gaming company uses Samsung's chips in the manufacturing of the Nintendo Switch 2's chip, so the handheld console may receive a price hike in the near and immediate future.

The AI chip demand boom is not expected to let up, and this is an "unfortunate byproduct" of the ongoing chip shortage. It has been forecasted that the memory chip shortage is expected to last well beyond 2030, meaning price pressures could persist. **Nintendo is a notable brand likely to be affected by Samsung's price hike, as it uses the chips in the manufacturing of its Switch 2 console.**

Common Questions

Is Samsung raising chip manufacturing prices by 15%?

Yes, Samsung is raising prices for new chip manufacturing orders by up to 15%. The price increase is attributed to strong demand for AI chips that is constricting supply.

Why is Samsung raising chip prices?

The primary reason is the high demand for AI chips. Demand from Chinese customers is reportedly the strongest, and the company hopes to turn a profit in its foundry business.

Will the Samsung price hike affect the Nintendo Switch 2?

Nintendo uses Samsung's chips in the manufacturing of the Switch 2. It is expected that the handheld console could receive a price hike in the near and immediate future as a result of Samsung's price increase.

Sources and Methodology

This article is based on information from a report by Reuters and was originally published by Lowyat.NET. The original reporting was sourced by "sources close to Reuters."

This article was last updated on May 21, 2025.