Samsung Electronics has raised prices on new orders for some of its most advanced chip-making services by as much as 15%, according to people familiar with the matter, the latest sign that surging demand for artificial-intelligence chips has tightened capacity across the semiconductor industry.
The increases took effect last month. Samsung lifted prices for chips made on its 4-nanometer process, known internally as SF4, and raised the price of wafers produced on the 5-nanometer SF5 line by 10% to 15%, the people said. Wafers made on the older 8-nanometer process rose by nearly 10%. The moves apply to new contracts rather than existing orders, they added.
The price hikes mark the second time in recent months that a major foundry has pushed through increases. Taiwan Semiconductor Manufacturing Co., the industry leader, raised prices earlier this year as demand for advanced chips outstripped supply. Samsung is following, in its own words, because its fabs are effectively full.
The timing matters for Samsung. Its foundry business, which makes chips for other companies, has been losing money since 2022, a stretch of losses that has left the unit as the weakest part of an otherwise resurgent semiconductor empire. The company’s memory division, by contrast, is enjoying a boom. Prices for DRAM and NAND flash have climbed sharply over the past year, pushing Samsung to record profits even as its contract-manufacturing arm bled cash.
The gap with TSMC remains wide. Samsung has spent years trying to win flagship orders from the world’s biggest chip designers, with mixed results. Nvidia, Apple and other large customers have poured their most demanding AI orders into TSMC’s fabs, while Samsung has captured a smaller share of the advanced work. The new pricing power does not close that gap, analysts said, but it does change the arithmetic of the business.
The demand behind the increases is unmistakable. AI accelerators, the specialized chips that power large language models, require enormous amounts of manufacturing capacity, and the boom has crowded out older, more routine orders. Customers who once expected discounts for volume are now competing for slots. Samsung’s price increases are a direct response to that crowding, the people familiar with the matter said. Even the older 8-nanometer line, a workhorse process that has been in production for years, is running near capacity, which explains why its wafers now cost nearly 10% more.
The company is also extending a strategy it has perfected in memory chips. Samsung and its rivals in DRAM and NAND have spent the past two years managing supply tightly, pushing prices higher and turning a commodity business into a pricing engine. Now Samsung is applying the same playbook to foundry, using capacity constraints to push through increases that would have been unthinkable a year ago.
The underlying driver, executives and analysts said, is the AI computing arms race. Every major cloud provider, every large model lab and every chip startup is trying to secure manufacturing capacity years in advance, and the competition has spilled from advanced nodes into older ones. Foundry prices, long considered a cost of doing business, have become a battleground.
The increases will ripple through the industry. Chip designers who buy from Samsung face higher input costs, and some are already negotiating to pass them along to customers. The price moves could also give TSMC room to push its own prices higher, analysts said, since the second-largest foundry no longer undercuts the leader.
For Samsung, the hikes are a rare piece of good news in a division that has been a persistent drag. The foundry unit’s losses have been a talking point for investors who otherwise cheer the memory boom, and Samsung sees the price increases as a chance to pull the unit out of years of losses. Executives have said little publicly about the moves, but the direction of travel is clear: the company wants its foundry arm to carry more of the load.
Foundry price increases rarely move in isolation. When the two largest contract manufacturers both push through hikes within months, chip designers lose the ability to play one against the other, and the added cost eventually lands on the buyers of phones, servers and cars. Analysts said that transmission is already showing up in the margins of chip designers this quarter, and that customers who locked in long-term supply agreements earlier this year are the ones watching the increases from the sidelines.
Whether the increases stick depends on demand holding up. AI chip orders have been the industry’s main engine of growth, but forecasts vary on how long the buildout lasts. If the boom cools, foundry customers will regain the upper hand in negotiations and prices could slip back.
For now, the direction is clear. Samsung’s fabs are full, its prices are rising, and the AI-driven scramble for capacity shows no sign of easing. The company that spent years chasing TSMC from behind has found, at least for the moment, that it can set its own prices too.
