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,SamsungConsultations with some clients have been completed, but discussions are still ongoing with others.
This marks a major shift in Samsung’s policy and could boost smartcell phone, the cost pressure on the downstream demand side of chips such as 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%.
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.
As the world’s largest memory chip manufacturer. Samsung Electronics is currently catching up with TSMC in advanced manufacturing. The company said on its earnings call that while demand for PCs and smartphones is weakening, 5G-related and server memory chips will see strong demand. It is expected that the overall chip foundry industry will maintain a tight production capacity situation in the next five years.