Samsung Electronics has increased prices for its chip contract manufacturing services by up to 15% on new orders, according to two people familiar with the matter, as demand for artificial intelligence chips outstrips available capacity.
The South Korean technology group’s foundry division, which has long operated at a loss, has seen a sharp rise in inquiries from clients seeking alternatives to TSMC, whose advanced-node capacity is largely booked. Samsung declined to comment.
The price increases, which apply to certain advanced manufacturing processes, follow a surge in orders from Chinese customers seeking fabrication services amid U.S. export restrictions on advanced semiconductors. Insiders said Chinese buyers are willing to pay the highest premiums to secure capacity. Demand has tightened to the point where Samsung is prioritizing new AI-related orders over legacy chip production.
Analysts now expect Samsung’s foundry business to turn profitable sooner than previously forecast, potentially as early as next year. The unit has recently secured contracts with Tesla and Apple, and is in talks with Google, according to people with knowledge of the discussions.
The shift comes as Samsung seeks to close the gap with TSMC, the Taiwanese market leader, which has limited room to expand capacity in the near term. Industry watchers note that while price hikes may deter some cost-sensitive customers, the current supply constraints and premium demand for AI-focused chips provide Samsung with leverage to push through increases without significant pushback.
