The AI boom has gobbled up manufacturing capacity on TSMC’s leading-edge fabs, so companies are turning to Samsung to make their chips – and this has given the company enough leverage to increase its prices by up to 15%, say insiders who spoke to Reuters.
In July, Samsung started charging US and Chinese customers 10-15% more for its 4nm node, called SF4, than it did the month before. Companies from Taiwan are looking at 5-10% higher bills.
And it’s not just the relatively recent 4nm node that got pricier – SF5 (5nm) also costs 10-15% more, while the rather old 8nm node is now almost 10% more expensive. Old though it may be, Samsung’s 8nm node is used by Nvidia to make the Nintendo Switch 2 chipset. The GPU designer also recently restarted production of the GeForce RTX 3060 series, which is on the same node.
Samsung’s foundry business has been losing money since 2022, according to analysts. However, the increased demand and higher prices can see the foundry return to profitability next year, which will be sooner than expected, according to Lee Min-hee, an analyst at BNK Investment & Securities.
Samsung’s foundry in Pyeongtaek, South Korea
Samsung’s yields have improved, which helped to bring in new customers. Also, there is strong demand for the HBM base dies (this is the bottom-most layer of an HBM memory stack – it routes power, signals and contains the HBM logic). These dies are made at Samsung’s Pyeongtaek SF4 production line, which also makes some chips for Qualcomm. This production line has been fully booked since late last year.
All of this is expected to increase the foundry’s revenue by “more than double-digit percentage points” in the second half of this year.