Following TSMC, Samsung chip foundry plans to increase prices by up to 20%

According to relevant US media reports, South Korea's Samsung Electronics (Samsung Electronics) intends to increase the price of wafer foundry by up to 20% this year, and is currently negotiating with customers.

Bloomberg reported that the overall price increase is between 15% and 20%, depending on the complexity of the foundry chips, and the traditional process chips will increase even more. The new pricing will be implemented from the second half of this year, and Samsung has completed consultations with some customers but is still in discussions with others.

This marks a major shift in Samsung's policy and may increase cost pressures on the downstream demand side of chips such as smartphones and automobiles. Samsung Electronics resisted industry pressure last year and maintained a relatively stable pricing strategy.

Chip foundries including Samsung Electronics and TSMC are currently facing huge cost pressures. Average production costs for chipmakers, from chemicals and natural gas to wafer equipment materials, are currently rising by 20%-30%.

Samsung is the world's second-largest chip foundry, after Taiwan's TSMC. TSMC has previously announced plans to raise prices. The company plans to increase its foundry quotations by 6% from January 2023. The company said the price hike was mainly due to inflationary pressures, rising costs and meeting its own massive capital spending plans. Unlike last August, when the company raised its foundry prices across the board for the first time in a decade, next year, TSMC’s advanced manufacturing process and mature manufacturing process prices will increase at the same rate.

At the end of April, Samsung said at its earnings conference that foundry demand from major customers was higher than existing capacity, and that the supply shortage was expected to continue.