According to Reuters, citing insiders, Samsung has raised prices for some of its advanced process chip foundry services, with increases of up to 15%. The price adjustment took effect in July, primarily driven by the explosive growth in demand for AI chips, leading to ongoing capacity constraints across the industry.
The current price increases are concentrated on Samsung's 4nm SF4 process node, with Chinese and US customers facing hikes of 10% to 15%, while customers in Taiwan see a more moderate increase of 5% to 10%. The 5nm SF5 process line has also seen a 10% to 15% increase, and the more mature 8nm node has risen by nearly 10%. Reports indicate that Chinese customers have been most accepting of the price hikes—restricted by US export controls, Chinese manufacturers have fewer channels to access advanced process capacity domestically, forcing them to rely more heavily on overseas foundries like Samsung, leaving them with limited bargaining power.
This is undoubtedly a major boon for Samsung's foundry business. Since 2022, Samsung has been under continuous pressure in its competition with TSMC, with its foundry operations long suffering from losses. As TSMC's advanced production lines become fully booked with AI chip orders, some customers are turning to Samsung for capacity. Over the past year, Samsung has successively secured foundry orders from Tesla, Apple, and Broadcom, and it is reported that Google is also in negotiations to use Samsung's SF4 process.
Of particular concern to everyday consumers and gamers is the price hike for the 8nm node, which is closely related to this issue—it's the manufacturing process used for the Nintendo Switch 2 processor. Nintendo already raised the console's price once this year due to memory shortages, and with foundry costs rising again, it may pave the way for a second price increase for the Switch 2.