Samsung Electronics has
raised prices for some advanced contract ?chipmaking services by
up to 15% for new orders, two people familiar with the matter
said, ?as demand for AI chips tightens capacity in a business
long dominated by TSMC.
Demand from ?Chinese customers has been particularly strong,
but Samsung has been unable to meet all orders because it must
serve U.S. customers and reserve part of its capacity to support
its own chip production, said the sources, who spoke on the
condition of anonymity because ?they are discussing sensitive
commercial matters.
Chinese customers are among those accepting the steepest
price increase, one of the sources said, underscoring how U.S.
curbs on exports of advanced chipmaking equipment to China ?have
increased local firms' reliance on overseas foundries.
The price hikes mark a turnaround for Samsung's foundry
business, which ?has ?been a loss maker since 2022, according to
industry estimates. The division has struggled to ?narrow the gap
with Taiwan Semiconductor Manufacturing Co, even as
Samsung reported record profits, driven by soaring prices for
memory chips used in AI systems.
Samsung raised prices in July for chips made using its
4-nanometre process, known as SF4, the sources said.
Prices for SF4 customers in China ?and the U.S. were increased
10% to 15% ?from the previous month, while customers in Taiwan,
home to TSMC, saw increases of 5% to 10%, according to one of
the sources.
Prices for wafers produced by its 5-nanometre SF5 process
rose by 10% to 15%, while those for its older 8-nanometre
technology rose by nearly 10%, according to the source.
Samsung declined to comment ?as the company does not provide
details on operational matters.
CUSTOMER LEVERAGE
Samsung produced 7% of global foundry ?revenue in the first
quarter of 2026, compared with more than 70% for TSMC, according
to research firm Counterpoint.
However, demand for AI chips has booked up much of TSMC's
leading-edge capacity. ?Samsung expects advanced processes to
account for more than half of foundry revenue this year, while
AI and high-performance-computing applications would make up
more than 30%, up from 15% to 20% in late 2025.
With TSMC's production taken up, Samsung ?has more leverage
to raise prices.
"As TSMC faces tight capacity and raises prices, customers
are shifting to rivals such as Samsung and Intel, prompting
Samsung to raise its prices as well," said Lee Min-hee, a
Seoul-based analyst at BNK Investment & Securities.
"If Samsung raises prices from here, its foundry business
could potentially become profitable as early as next year,
earlier than previously expected," Lee said.
Samsung's SF4 production line at its Pyeongtaek, South
Korea, plant has been running at full capacity since late last
year, said a person familiar with the company's operations.
The line produces logic chips for ?customers including
Qualcomm as well as base dies used in Samsung's own
multi-layer high-bandwidth memory (HBM) chips, the person said.
Samsung said in July ?it expects the foundry unit to return
to profit in the near future, helped by higher factory
utilization, better production yields and firmer pricing.
It also said then rising sales to major ?U.S. and Chinese
customers, along with demand for HBM base dies, should help lift
foundry revenue by more than double-digit ?percentage points in
the second half from a year earlier.
Improvements in production yields have also helped Samsung
win customers.
Tesla and Apple unveiled chip manufacturing
deals with Samsung last year.
Samsung also announced an AI chip ?production deal with Broadcom
in July, while Nvidia CEO Jensen Huang said in March
that Samsung would manufacture its new AI inference processor.
Google is also in talks with Samsung to manufacture chips
using SF4, said one ?of the two sources familiar with the price
increases.
Google did not respond to a request for comment.
Published on August 19, 2026