Samsung Electronics raised prices on new orders for its advanced contract chipmaking services by as much as 15% in July 2026, according to two people familiar with the matter cited by Reuters. <cite index="5-1">The increases applied to its 4-nanometer (nm), 5 nm, and 8 nm foundry services, with Chinese and U.S. customers absorbing the largest hikes.</cite> <cite index="1-4">Customers in China and the United States faced increases of 10% to 15% for Samsung's SF4 process, while Taiwanese customers saw increases of 5% to 10%.</cite> <cite index="1-5">Prices for the 5 nm process also rose 10% to 15%, while the 8 nm process increased by close to 10%.</cite> <cite index="1-3">Samsung declined to comment on the pricing, saying it does not disclose details about operational matters.</cite>
Market Context
<cite index="5-11,5-12">The pricing move underscores how surging demand for artificial intelligence (AI) chips is reshaping the economics of the global foundry business. Taiwan Semiconductor Manufacturing Company (TSMC), which commands more than 70% of global foundry revenue, has seen its leading-edge capacity booked out by AI orders.</cite> <cite index="11-8">TSMC had notified customers of 5% to 10% price increases across all sub-5 nm nodes starting in January, with some services reportedly rising around 25% in 2027.</cite> <cite index="11-1">TSMC's 3 nm capacity is reportedly booked through 2026 and 2027, while its 2 nm output for 2026 has already been claimed by customers including Apple, Nvidia, and Advanced Micro Devices (AMD).</cite>
<cite index="9-12">Samsung accounted for roughly 7% of global foundry revenue during the first quarter of 2026, compared with more than 70% for TSMC, according to research firm Counterpoint.</cite> <cite index="12-8">"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.</cite>
AI Revenue Mix
<cite index="6-7,6-8">Samsung expects advanced manufacturing processes to generate more than half of its foundry revenue this year. AI and high-performance computing (HPC) applications are projected to represent more than 30% of the total, compared with between 15% and 20% in late 2025.</cite> <cite index="10-6">The shift illustrates how AI infrastructure investment is changing Samsung's foundry revenue mix, increasing the importance of advanced logic chips, AI processors, and components supporting high-bandwidth memory (HBM).</cite>
<cite index="2-5,2-6">Samsung's SF4 production line at its Pyeongtaek plant in South Korea has operated at full capacity since late 2025, reflecting the strength of demand. The manufacturing line produces logic chips for customers including Qualcomm and base dies used in Samsung's own multilayer HBM chips.</cite>
Demand Pressures and Customer Dynamics
<cite index="12-3,12-4">Demand from Chinese customers has been particularly strong, but Samsung has been unable to meet all orders because it must serve U.S. customers and reserve part of its capacity to support its own chip production. Chinese customers are among those accepting the steepest price increases, underscoring how U.S. curbs on exports of advanced chipmaking equipment to China have increased local firms' reliance on overseas foundries.</cite>
<cite index="7-5">Samsung's chip exports to China grew 54% between 2023 and 2024, including a deal that supplied Baidu's Kunlun with more than three years' worth of logic dies for AI accelerators.</cite> <cite index="10-8,10-9">Samsung announced an AI chip manufacturing deal with Broadcom in July 2026, while Nvidia CEO Jensen Huang said in March 2026 that Samsung would manufacture Nvidia's new AI inference processor. Google is also in discussions with Samsung about manufacturing chips using the company's SF4 4 nm process, according to Reuters.</cite>
Profitability Outlook
<cite index="5-5">Samsung's foundry division has been loss-making since 2022.</cite> <cite index="8-9">The company said in July that it expected the foundry unit to return to profit soon, helped by higher factory use, better yields, and firmer pricing.</cite> <cite index="4-6">"If Samsung raises prices from here, its foundry business could potentially become profitable as early as next year, earlier than previously expected," analyst Lee Min-hee said.</cite> <cite index="16-10">Samsung's advanced foundry lines are expected to operate at full capacity in the second half of the year, driven by rising orders for 2 nm chips, AI accelerators, and HBM base dies.</cite>