Samsung raises advanced chipmaking prices by up to 15% amid AI demand

Samsung Electronics has raised prices for some advanced contract chipmaking services by up to 15% for new orders, according to two people familiar with the matter. This move comes as demand for AI chips tightens capacity in a sector long dominated by TSMC.

Demand from Chinese customers has been particularly strong. However, Samsung faces constraints serving all orders due to obligations to US customers and the need to reserve capacity for its own chip production. Chinese clients are accepting the steepest price increases, highlighting their increased reliance on overseas foundries due to US export curbs on advanced chipmaking equipment.

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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.

These price hikes signal a significant turnaround for Samsung's foundry business, which industry estimates show has been a loss-maker since 2022. The division has struggled to compete with Taiwan Semiconductor Manufacturing Co (TSMC), even as Samsung achieved record profits from memory chips used in AI systems. Samsung increased prices in July for chips made using its 4-nanometer process (SF4) and 5-nanometer process (SF5) by 10% to 15%. Prices for its older 8-nanometer technology also rose by nearly 10%.

Samsung expects advanced processes to constitute over half of its foundry revenue this year, with AI and high-performance computing applications contributing more than 30%, a substantial increase from 15% to 20% in late 2025. With TSMC's production capacity fully booked, Samsung is leveraging its position 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, an analyst at BNK Investment & Securities. Lee added that if Samsung continues to raise prices, its foundry business could become profitable as early as next year.

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If Samsung raises prices from here, its foundry business could potentially become profitable as early as next year, earlier than previously expected.