According to multiple reports from Reuters, Samsung Electronics has raised rates for advanced chipmaking contract services by up to 15% for its latest orders, as confirmed by two people familiar with the matter. The price increases affect different customer segments, with Chinese clients experiencing the sharpest uptick amid US restrictions on AI chip exports. The company has been unable to fully meet Chinese demand due to commitments to US customers and its own chip requirements, which have reserved some production capacity. As reported by Reuters, 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 narrow the gap with Taiwan Semiconductor Manufacturing Co, even as Samsung reported record profits, driven by soaring prices for memory chips used in AI systems.
As reported by Reuters, Samsung implemented differentiated pricing across regions for its various chipmaking processes. Chinese and US customers saw prices increase by 10% to 15% for the 4-nanometre SF4 process, while Taiwanese customers experienced a 5% to 10% price rise. For the 5-nanometre SF5 process, prices increased by 10% to 15%, and the older 8-nanometre technology saw an increase of nearly 10%. The price hikes come as demand for AI chips continues to tighten capacity in a business that has long been dominated by Taiwan Semiconductor Manufacturing Co (TSMC). Chinese customers are among those accepting the steepest price increase, underscoring how US curbs on exports of advanced chipmaking equipment to China have increased local firms' reliance on overseas foundries.
According to the reports, the price increases are driven by strong demand from Chinese customers, though supply constraints persist due to US restrictions on AI chip exports. These restrictions bar the export of AI chips from companies such as Nvidia and AMD to China, along with prohibitions on shipping semiconductor manufacturing equipment including lithography machines and fabrication plants. The US measures have created supply-demand imbalances that are driving up pricing across the industry, with demand for AI chips particularly tightening capacity in the contract chipmaking sector. As reported by Reuters, Chinese customers are among those accepting the steepest price increase, underscoring how US curbs on exports of advanced chipmaking equipment to China have increased local firms' reliance on overseas foundries.
Samsung has secured significant AI chip production deals that are driving its market position. According to Reuters, the company announced an AI chip production deal with Broadcom (AVGO.O) 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, though the company did not respond to requests for comment. Samsung's SF4 production line at its Pyeongtaek, South Korea plant has been running at full capacity since late 2025, producing logic chips for customers including Qualcomm and base dies used in Samsung's own multi-layer high-bandwidth memory (HBM) chips. Improvements in production yields have also helped Samsung win customers, with Tesla and Apple unveiling chip manufacturing deals with Samsung last year.
According to Reuters, 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. The company produced 7% of global foundry revenue in the first quarter of 2026, compared with more than 70% for TSMC, according to research firm Counterpoint. As reported by Reuters, analyst Lee Min-hee from 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." The analyst suggests that if Samsung raises prices further, its foundry business could potentially become profitable as early as next year, earlier than previously expected. 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, with rising sales to major U.S. and Chinese customers expected to lift foundry revenue by more than double-digit percentage points in the second half from a year earlier.
