Samsung Raises Foundry Prices by Up to 15% as AI Demand Tightens Capacity

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

Strong Chinese Demand, Limited Capacity

Demand from Chinese customers has been especially strong, but Samsung has been unable to fulfill all orders. The sources, who requested anonymity because they are discussing sensitive commercial matters, said Samsung must prioritize US customers and reserve part of its capacity to support its own chip production.

Chinese customers are among those accepting the steepest price increases, one source said. This underscores how US restrictions on exports of advanced chipmaking equipment to China have increased local firms' reliance on overseas foundries.

Price Hikes Across Key Processes

The price hikes mark a turnaround for Samsung's foundry business, which has been a loss-maker since 2022, according to industry estimates. The division has struggled to close the gap with Taiwan Semiconductor Manufacturing Co (TSMC), even as Samsung reported record profits driven by soaring prices for memory chips used in AI systems.

Samsung raised prices in July for chips made using its 4-nanometre process, known as SF4, the sources said. Prices for SF4 customers in China and the US increased 10% to 15% from the previous month, while customers in Taiwan, home to TSMC, saw increases of 5% to 10%, according to one source.

Prices for wafers produced by its 5-nanometre SF5 process rose by 10% to 15%, while those for its older 8-nanometre technology rose by nearly 10%, the source added.

Samsung declined to comment, stating that the company does not provide details on operational matters.

Customer Leverage and Market Position

Samsung produced 7% of global foundry revenue in the first quarter of 2026, compared with more than 70% for TSMC, according to research firm Counterpoint. However, demand for AI chips has booked up much of TSMC's leading-edge capacity. 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 2025.

With TSMC's production taken up, Samsung has more leverage 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, a Seoul-based analyst at BNK Investment & Securities.

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

Production and Customers

Samsung's SF4 production line at its Pyeongtaek, South Korea, plant has been running at full capacity since late last year, a person familiar with the company's operations said. 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) chips.

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 pricing. It also said rising sales to major US 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 earlier.

Improvements in production yields have also helped Samsung win customers. Tesla and Apple unveiled chip manufacturing deals with Samsung last year. Samsung also announced an AI chip production deal with Broadcom in July, while Nvidia CEO Jensen Huang said in March that Samsung would manufacture its new AI inference processor.

Google is also in talks with Samsung to manufacture chips using SF4, said one of the two sources familiar with the price increases. Google did not respond to a request for comment.

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