Samsung Raises Chipmaking Prices Up to 15% as Surge in Demand for AI Chips Tightens Foundry Capacity

Samsung Raises Prices Across Advanced Foundry Processes

Samsung Electronics raised prices for advanced chipmaking services by up to 15% for new orders placed in July, marking a significant shift in the foundry market as AI demand tightens manufacturing capacity1

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. The increases affected multiple nodes, with the 4nm process (SF4) seeing prices climb 10% to 15% for customers in China and the U.S., while customers in Taiwan faced smaller increases of 5% to 10%2

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. Prices for wafers produced using the 5nm process rose by 10% to 15%, and the older 8nm technology increased by nearly 10%3

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Chinese Customers Face Steepest Price Hikes

Chinese customers are accepting the largest price increases, underscoring how U.S. export restrictions on advanced chipmaking equipment have increased their reliance on overseas foundries2

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. Demand from Chinese customers has been particularly strong, but Samsung has been unable to meet all orders because it must serve U.S. customers first and reserve capacity for its own chip production3

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. Chinese orders now exceed what Samsung can take on due to this captive demand situation1

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. Samsung's chip exports to China grew 54% between 2023 and 2024, including a deal that supplied Baidu's Kunlun with more than three years' worth of logic dies for AI accelerators1

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Full Capacity Operations Drive Pricing Power

Samsung's SF4 production line at its Pyeongtaek, South Korea, plant has been running at full capacity since late last year2

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. 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) chips3

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. This means external foundry customers compete for wafer starts with Samsung's memory division, the business that drove its record profits1

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. 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 20255

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TSMC Capacity Constraints Create Market Opportunity

With TSMC's leading-edge capacity booked out by AI orders, Samsung has gained more leverage to raise prices1

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. TSMC notified customers of 5% to 10% increases across all sub-5nm nodes starting in January, with some services reportedly rising around 25% in 20271

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. Samsung produced 7% of global foundry revenue in Q1 2026 against more than 70% for TSMC1

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. Lee Min-hee, an analyst at BNK Investment & Securities, noted that "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"2

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Path to Profitability for Samsung Foundry Business

The price hikes mark a potential turnaround for Samsung's foundry business, which has been loss-making since 20222

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. Lee Min-hee stated that "if Samsung raises prices from here, its foundry business could potentially become profitable as early as next year, earlier than previously expected"3

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. 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 pricing2

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. The company also indicated that 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 earlier2

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Major Customer Wins Signal Growing Confidence

Improvements in production yields have helped Samsung win customers across the technology sector3

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. Tesla unveiled a $16.5 billion AI chip contract with Samsung, while Apple announced a manufacturing deal last year1

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. Samsung announced an AI chip production deal with Broadcom in July, and Nvidia CEO Jensen Huang said in March that Samsung would manufacture its new AI inference processor2

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. Google is also in talks with Samsung to manufacture chips using SF4, according to sources familiar with the price increases3

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. Samsung recently secured a $200 billion deal with Broadcom to provide 2nm technology and HBM4 memory4

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. These partnerships signal growing confidence in Samsung's ability to compete with TSMC in advanced manufacturing, particularly as geopolitical factors and supply chain diversification become increasingly important considerations for technology companies developing AI processors and other advanced chips.