With global AI demand increasing the semiconductor contract manufacturing industry's importance, Samsung, along with TSMC, is increasing prices, says a report from the Korean media. The Korean firm is hiking the prices for certain manufacturing process technology nodes, say the sources, which is a different strategy than TSMC's. The price hikes stem from higher demand, which has shifted the dynamics of the semiconductor manufacturing industry to supply-driven pricing instead of demand-driven pricing.
Industry Insiders Believe Chip Price Hikes Will Continue As Long As There Is Demand
Before the rapid and large-scale AI infrastructure buildout shook up the semiconductor supply chain, firms such as Taiwan's Taiwan Semiconductor Manufacturing Company (TSMC) had to work with their customers to determine the demand for next-generation chips. Companies such as Apple would also invest in TSMC's advanced chip manufacturing lines with the promise of having secured manufacturing capacity ahead of major product launches.
However, industry analysts quoted in the Korean media believe that the large-scale AI chip demand has shifted the global chip manufacturing industry to supply-driven instead of demand-driven. With demand now exceeding supply, firms such as TSMC and Samsung can raise prices in order to ensure that those willing to pay are able to secure production capacity.
On this front, today's report suggests that Samsung has also raised wafer prices for its products. The price hike follows TSMC, who was reportedly doing the same according to a report that surfaced in June.
According to the details, unlike TSMC's price increases, which are broad-based, Samsung has chosen targeted price hikes. Primarily focused on the 5-nanometer and 4-nanometer manufacturing process technologies, the Korean firm has increased prices by roughly 15%, suggest industry sources.
They add that the opportunity for the price hikes has arisen due to high demand for AI chips, which has created maneuvering room for the chip manufacturer. The latest trend in price hikes means that chip manufacturers are also faced with increased investment costs for the new technologies.
When compared to Samsung, TSMC's price hikes had also covered the mature 7-nanometer manufacturing processes, June's report had suggested. The Taiwanese firm had hiked prices between 5% to 10%, the report claimed. Responding to the news, TSMC remarked that it did not comment on pricing. "Our pricing strategy is strategic, not opportunistic. We will continue to work closely with customers and sell our value to them," the firm said.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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