Price increase of 10%! Samsung's wafer foundry considering price hikes for 4nm and 8nm processes

Samsung Electronics’ foundry division is planning to adjust its pricing strategy, intending to implement price increases for specific mature processes to address capacity shortages and improve profitability. This move marks Samsung’s attempt to reshape its pricing structure in the foundry market amid stable yield rates and concentrated demand.

According to sources in the semiconductor industry who spoke to Korean media ZDNET, Samsung’s wafer foundry center has recently begun discussions with major partners, focusing on raising prices for 4nm and 8nm processes. Market reports indicate that the expected price increase is about 10%, though the exact amount may vary depending on customer type and process differences.

This price increase intention mainly stems from the capacity of these two processes nearing its limit. As the yields for 4nm and 8nm processes stabilize and enter a mature phase, high-performance-focused customers tend to lock in 4nm capacity, while cost-conscious customers place large orders for 8nm, leading to high utilization of related production lines. Industry insiders confirm that there have been recent rumors about Samsung’s foundry capacity being tight, and internal working groups are indeed discussing price hikes.

This price adjustment is expected to help Samsung Electronics ensure its ongoing investment in its processes and improve profitability in the medium to long term. Even with the price increase, industry consensus generally holds that compared to TSMC, which continues to raise prices, Samsung foundry will still maintain a certain cost advantage among price-sensitive customers.

Capacity Bottlenecks Drive Price Reassessment

The current price increase plan mainly reflects strong demand for certain mature processes. According to Korean media ZDNET, 4nm and 8nm processes are the most in-demand areas within Samsung’s foundry business, with actual capacity utilization reaching full capacity.

This supply-demand tension directly fuels the motivation for price adjustments. Since yields for these two processes are now very stable, for customers pursuing high-performance chip mass production, 4nm is the primary choice; for those prioritizing cost performance, 8nm offers a competitive solution. As orders from various customers flood in, capacity bottlenecks force Samsung to use pricing as a lever to balance supply and demand and optimize profit margins.

Still Competitive Against TSMC in Pricing

One external factor influencing this price hike is TSMC’s pricing strategy as the industry leader. Driven by surging AI demand and continuous order growth, TSMC has recently been raising its foundry prices. This year, affected by rising labor, raw material, and energy costs, TSMC is expected to continue its price increase strategy, with some process price hikes possibly reaching up to 20%.

In this context, even if Samsung Electronics raises prices by 10%, it can still maintain relative price competitiveness in the market. An insider from the semiconductor industry pointed out that even with Samsung’s price increase, the gap between Samsung and TSMC’s quotes remains significant. For customers highly sensitive to price, Samsung foundry remains an attractive alternative.

Strategic Intent and Long-term Profitability

This price adjustment is not just a tactical move to address short-term capacity pressures but also a strategic effort by Samsung to enhance its long-term financial health. By optimizing the pricing of popular processes, Samsung’s foundry division aims to secure more funds to reinvest in process R&D and capacity expansion.

Recent developments show that Samsung’s foundry business is at a critical growth stage. Not only are 4nm and 8nm processes performing strongly, but the company is also actively expanding into new fields such as automotive semiconductors. It has previously secured 8nm orders from Hyundai Motor and plans to advance 2nm process mass production by 2026. Through this price adjustment, Samsung aims to solidify its profitability foundation and reserve resources for the competition of next-generation advanced processes.

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