Samsung increases foundry prices in passing on rising materials costs

Recently, it has been reported that TSMC has contacted customers to inform them that it will increase the quotation for foundry orders in 2023, and the price increase will be between 5% and 8%. Obviously, in the foundry, not only the industry leader TSMC intends to do this, but recently Bloomberg reports that Samsung, the second-ranked, also plans to increase the price of the foundry.

It is said that Samsung is negotiating with customers to negotiate new foundry quotations, and the price will increase by between 15% and 20%, depending on the specific process node and application of manufacturing technology. The increase is quite large and is expected to be implemented in the second half of 2022. Similar to other foundries, the increase in advanced process nodes will be lower, while the increase in mature process nodes will be larger. It is rumored that some Samsung customers have agreed to new terms.

Different from other fabs in the top rankings, Samsung has adopted a relatively stable pricing strategy in 2021, with stable quotations and no constant price adjustments due to strong demand. But with fabs operating at 100 percent or more capacity, Samsung also faces additional risks and the rate of equipment wear has accelerated. Recent global inflation, logistics, price hikes in the semiconductor supply chain, and other unstable factors have greatly increased operational risks and cost pressures, forcing Samsung to consider raising prices.
Although the demand in the global market seems to have weakened compared to the previous stage, such as the personal computer market even facing a downward trend, many market segments continue to grow. The supply of chips has not yet reached saturation, the demand for various types of ICs is still high and there is no sign of slowing down, and the trend of price increases by chip manufacturers will continue.