Samsung Electronics (USOTC:SSNHZ) has increased prices for some of its advanced contract chip manufacturing services by as much as 15% on new orders, according to two people familiar with the matter, as booming demand for artificial intelligence chips puts pressure on available foundry capacity.
Demand from Chinese customers has been particularly strong. However, Samsung has reportedly been unable to fulfil every order because it must also accommodate U.S. clients and reserve manufacturing capacity for its own semiconductor operations, the sources said on condition of anonymity because of the commercially sensitive nature of the information.
Chinese customers are among those accepting the largest increases, according to one source. U.S. restrictions on exports of advanced semiconductor manufacturing equipment to China have increased the dependence of Chinese chip companies on overseas foundries.
The pricing shift could represent an important turning point for Samsung’s foundry operation, which industry estimates suggest has been loss-making since 2022. The business has struggled to close the substantial market-share gap with Taiwan Semiconductor Manufacturing Co, even as Samsung’s wider semiconductor operations have benefited from soaring prices for memory chips used in AI infrastructure.
Samsung Lifts Prices Across Several Manufacturing Processes
Samsung raised prices in July for semiconductors manufactured using its 4-nanometre SF4 process, according to the sources.
Customers in China and the U.S. faced increases of between 10% and 15% compared with the previous month, while customers in Taiwan saw prices rise by between 5% and 10%, one source said.
Prices for wafers manufactured using Samsung’s 5-nanometre SF5 process reportedly increased by 10% to 15%, while pricing for its older 8-nanometre technology rose by almost 10%.
Samsung declined to comment, citing its policy of not discussing operational details.
TSMC Capacity Constraints Give Samsung Greater Pricing Power
Samsung accounted for approximately 7% of global foundry revenue during the first quarter of 2026, compared with more than 70% for TSMC, according to Counterpoint.
However, accelerating demand for AI semiconductors has absorbed much of TSMC’s leading-edge manufacturing capacity, creating opportunities for alternative suppliers.
Samsung expects advanced manufacturing processes to generate more than half of its foundry revenue this year. AI and high-performance computing applications are projected to represent more than 30% of the total, compared with between 15% and 20% in late 2025.
With TSMC capacity increasingly constrained, Samsung has gained greater flexibility to increase its own prices.
“As TSMC faces tight capacity and raises prices, customers are shifting to rivals such as Samsung and Intel, prompting Samsung to raise its prices as well,” said Lee Min-hee, a Seoul-based analyst at BNK Investment & Securities.
“If Samsung raises prices from here, its foundry business could potentially become profitable as early as next year, earlier than previously expected,” Lee added.
Pyeongtaek SF4 Production Running at Full Capacity
Samsung’s SF4 manufacturing line at its Pyeongtaek facility in South Korea has reportedly been operating at full capacity since late last year.
The facility manufactures logic semiconductors for customers including Qualcomm, as well as base dies used in Samsung’s own multi-layer high-bandwidth memory chips.
Samsung said in July that it expects its foundry division to return to profitability in the near future as factory utilisation increases, manufacturing yields improve and pricing becomes more favourable.
The company also expects stronger business from major U.S. and Chinese customers, together with demand for HBM base dies, to drive foundry revenue growth of more than a double-digit percentage in the second half compared with the previous year.
Samsung Adds Major AI Chip Customers
Improving manufacturing yields have also helped Samsung attract additional customers as it attempts to strengthen its competitive position in advanced semiconductor production.
Tesla and Apple announced chip manufacturing agreements with Samsung last year, while Samsung disclosed an AI semiconductor production deal with Broadcom in July.
Nvidia CEO Jensen Huang said in March that Samsung would manufacture the company’s new AI inference processor, further expanding the South Korean group’s exposure to rapidly growing AI computing demand.
Google is also discussing the possibility of having Samsung manufacture chips using its SF4 process, according to one of the sources familiar with the recent price increases.
Google did not respond to a request for comment.
The combination of constrained industry capacity, stronger AI demand, improved manufacturing yields and higher prices could accelerate Samsung’s efforts to turn its foundry operation profitable while narrowing some of the considerable distance separating it from market leader TSMC.