Samsung raises foundry prices 15% for AI demand
The semiconductor world is currently heating up, not just from the relentless pursuit of faster chips, but from a fierce battle over pricing and capacity. Samsung has recently implemented significant price hikes on new foundry orders across its advanced manufacturing lines, sending ripples through the global technology supply chain.
In July, the chipmaker increased prices on orders for its 4nm, 5nm, and 8nm foundry processes. These increases reached as high as 15% for customers in the United States and China. This move comes amid complex geopolitical dynamics; Chinese chip designers, facing restrictions on advanced equipment from the U.S., are reportedly absorbing the largest portion of these hikes.
The scale of the situation is massive. Samsung’s 4nm line at its Pyeongtaek facility has reportedly been operating at full capacity since late last year. As the demand for cutting-edge silicon skyrockets, the foundry operations become a prime battleground for global technology leaders.
The price adjustments were uneven across different nodes. While customers in the U.S. and China saw substantial increases, those in Taiwan experienced smaller hikes, ranging from 5% to 10%. For instance, pricing for the 4nm SF4 process climbed 10% to 15% from June, and the 5nm SF5 process saw similar increases. The 8nm node also saw a noticeable rise of nearly 10%.
This competitive pricing environment is further complicated by the internal structure of Samsung’s operations. The Pyeongtaek SF4 line not only builds logic chips for major partners like Qualcomm but also competes directly with Samsung‘s memory division for wafer starts, which historically drives the company’s record profits.
The competitive landscape is dominated by TSMC, which commands a commanding lead in the foundry space. While analysts place Samsung at around 7% of global foundry revenue in Q1 2026 compared to TSMC’s over 70%, this gap is evolving. TSMC is strategically positioning itself, notifying customers of 5% to 10% increases across all sub-5nm nodes, with reports suggesting some services may rise by up to 25% in 2027.
The engine driving this intense competition is the demand for advanced AI chips. Major clients like Nvidia, Apple, and AMD are driving colossal contracts—including Tesla’s $16.5 billion AI chip deal and various agreements with Broadcom—which are fueling the demand for the most advanced fabrication capacity.
Despite facing these pressures, Samsung‘s foundry division is on a trajectory toward profitability. Industry analysts suggest that if Samsung maintains its current pricing strategy, the division could become profitable as early as next year, backed by a growing list of high-value contracts. The future of chipmaking looks less like a race and more like a complex interplay of strategic pricing and massive, sustained demand.
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