Samsung Electronics, the major Korean conglomerate, has raised prices for some advanced contract chipmaking services by up to 15 per cent for new orders as AI has caused spikes in demand, Reuters has reported.
Citing two people familiar with the matter, the outlet reported that the move comes after Samsung has been unable to meet all of its order requests after particularly strong demand from Chinese customers.
The manufacturer must serve its US customers and maintain a portion of its production capacity for its own chips, leaving some prospective Chinese buyers in the cold, the people said.
It is now these buyers who are among those accepting the steepest price increase, the newswire reported, underscoring the impact of the US’s restrictions on the export of advanced chipmaking equipment to the country.
Samsung raised the prices for its four-nanometre process, SF4, in July, according to the sources. Prices for customers in China and the US were increased 10-15 per cent from the previous month, while Taiwanese customers saw an increase of between five and 10 per cent.
Prices for chips produced using its five-nanometre process, SF5, rose between 10 and 15 per cent, while those using its older eight-nanometre architecture rose almost 10 per cent, Reuters reported.
The price hikes may also mark a turning point for Samsung’s foundry business, which has been loss making since 2022, Reuters reported.
Despite Samsung posting record profits, driven by demand for AI memory, the company has struggled to compete with Taiwan Semiconductor Manufacturing Company (TSMC) on advanced chip development. TSMC was reportedly planning to raise its own prices for advanced chips last month.
In March, Samsung announced it would spend over 110 trillion South Korean Won ($73.2 billion) on research and development to regain its lead in the AI chip development space.
