In response to a surge in demand for chip manufacturing, Samsung has announced a price increase of up to 15% for its semiconductor fabrication services, as reported by insiders. This change highlights the growing pressure on production capacity, especially due to the need for advanced chips as the artificial intelligence (AI) sector continues to expand.
Effective July, Samsung raised prices for its 4nm chip production node, known as SF4, by 10-15% for customers in both the United States and China. Clients from Taiwan are also experiencing increases ranging from 5-10% in their manufacturing costs.
The hike in prices isn't limited to the newer 4nm technology; even the older 5nm (SF5) and 8nm nodes have seen price surges of 10-15% and nearly 10%, respectively. Interestingly, Samsung's 8nm process is still in high demand, being utilized by Nvidia for the upcoming Nintendo Switch 2 chipset along with the recently resumed production of the GeForce RTX 3060 series, which also relies on the same fabrication process.
Despite its foundry business operating at a loss since 2022, analysts are optimistic. The influx of new orders and elevated pricing could herald a return to profitability sooner than anticipated, possibly as early as next year, as stated by Lee Min-hee, an analyst at BNK Investment & Securities.
Samsung’s foundry in Pyeongtaek, South Korea
Samsung’s advancements in manufacturing yields have enabled it to attract new clients. Furthermore, there is robust demand for high-bandwidth memory (HBM) base dies, which are produced at the Pyeongtaek SF4 production line, a facility that has been operating at maximum capacity since late last year to meet the demand from customers, including Qualcomm.
With these factors in play, the foundry's revenue is projected to see an increase of “more than double-digit percentage points” in the latter half of this year.
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