Samsung Hikes Foundry Prices Up to 15% Amid AI Capacity Crunch
The chipmaker is leveraging a bottleneck at TSMC to raise rates for its 4nm, 5nm, and 8nm processes.
Samsung has implemented price increases of up to 15% for new orders across its advanced foundry processes, capitalizing on a global shortage of high-end chip production capacity. The price hikes, which took effect in July, primarily target customers in the U.S. and China as the artificial intelligence boom pushes the industry's leading manufacturers to their limits.
According to industry reports, the 4nm (SF4) process saw the most significant adjustments, with price increases ranging from 10% to 15% for customers in the U.S. and China, and 5% to 10% for those in Taiwan. The 5nm (SF5) process also experienced a 10% to 15% increase, while the 8nm node rose by approximately 10%. This pricing shift comes as Samsung's 4nm production line at its Pyeongtaek facility has been running at full capacity since late 2025.
The TSMC Bottleneck
These moves occur against a backdrop of extreme market imbalance. As of the first quarter of 2026, TSMC continues to dominate the global foundry landscape with a market share exceeding 70%, while Samsung holds approximately 6.5%. However, the surge in AI chip demand has created a severe bottleneck at TSMC, which has already notified its own customers of 5% to 10% price increases for sub-5nm nodes.
For years, Samsung's foundry division has struggled to compete with TSMC's efficiency and yield, remaining loss-making since 2022. However, the current capacity crunch has forced chip designers to seek alternatives to TSMC, granting Samsung a rare window of pricing power. By raising its rates while remaining below TSMC's projected future quotes, Samsung is attempting to improve its margins without pricing itself out of the market.
Path to Profitability
This shift in pricing strategy could fundamentally alter the financial trajectory of Samsung's semiconductor business. Lee Min-hee, an analyst at BNK Investment & Securities, noted that the foundry business could potentially become profitable as early as next year if these trends persist.
For the broader industry, the development suggests a slight reduction in the extreme reliance on a single supplier for the world's most advanced silicon. If Samsung can successfully convert this capacity shortage into sustained revenue growth, it may alter the cost structure for AI chip designers who have previously had little leverage in negotiations with the industry's dominant player.
What to Watch
Industry observers are now monitoring whether this pricing power is a temporary spike or a permanent shift in the foundry competitive landscape. While the current demand for AI hardware provides a tailwind, Samsung's long-term success will depend on whether it can maintain high yields and attract new high-volume clients as TSMC eventually expands its own capacity. It remains to be seen if other secondary foundries will attempt similar price adjustments in response to the AI-driven shortage.