Samsung hikes chip prices as AI demand outstrips supply

Samsung Foundry is raising chip manufacturing prices for new customers by up to 15%, according to a Chosun Biz report, a sharp reversal for a business that was cutting prices to win clients just months ago.

The increase applies to advanced 4nm and 5nm process nodes, along with select 8nm nodes used for automotive chips.

Earlier this year, Samsung was slashing 2nm prices by roughly a third to lure customers away from rival TSMC.

That pricing pressure has now flipped. Samsung Foundry returned to monthly profitability in June for the first time in three years, and rising order volume appears to have given the company enough leverage to raise prices instead of discounting them.

Prices in chip fabrication usually remain stable once production yield rates reach equilibrium levels; however, due to the ongoing AI revolution, there have emerged constant shortages between available and desired products.

For example, the largest foundry, TSMC, has informed its key customers such as Nvidia, Apple, and AMD that wafer prices will increase by 5% to 10% in 3nm, 5nm, and 7nm nodes.

In addition, low yields worsen the situation since, for example, Samsung reportedly charges $20,000 per wafer for its 2nm production, and prices tend to soar dramatically when yields do not meet expectations.

The pricing power of Samsung has shifted due to the signing of a deal worth $16.5 billion with Tesla on producing 2 nm chips for its cars, robots, and AI servers.

Following this deal, Samsung has attracted more customers, including AMD, Anthropic, BYD, Google, and Meta, which reportedly seek 2 nm and 4 nm node fabrication services for Samsung chips.