For years, Samsung’s foundry business has been the perennial second-place finisher chasing TSMC’s dominance in contract chipmaking. This week’s price hike suggests that dynamic may finally be
For years, Samsung’s foundry business has been the perennial second-place finisher chasing TSMC’s dominance in contract chipmaking. This week’s price hike suggests that dynamic may finally be shifting in Samsung’s favor — not because Samsung got dramatically better, but because AI demand has gotten dramatically bigger than the industry’s total capacity to meet it.
Samsung Electronics raised prices on some of its most advanced contract chipmaking services by up to 15% for new orders, according to Reuters, citing two people familiar with the matter. The increases, effective in July, apply to chips made with Samsung’s 4-nanometer SF4 process — with customers in China and the US seeing hikes of 10% to 15%, and Taiwan-based customers seeing smaller increases of 5% to 10%. The 5-nanometer SF5 process saw similar 10% to 15% increases, while pricing for older 8-nanometer technology rose by nearly 10%. Samsung declined to comment, citing its policy against discussing operational details.
The underlying dynamic is straightforward: TSMC, which controls more than 70% of global foundry revenue compared to Samsung’s roughly 7%, has effectively sold out its most advanced capacity to AI’s biggest customers. TSMC has reportedly pre-sold all its 3-nanometer capacity through 2027 and its entire 2026 2-nanometer output to Apple, Nvidia, and AMD. That leaves companies who can’t secure a TSMC slot with far fewer alternatives — and Samsung, despite trailing on market share, is one of the only foundries in the world capable of producing chips at these advanced nodes at all. Scarcity at the top of the market is giving the number-two player genuine leverage for the first time in years.
Notably, Chinese customers are absorbing the steepest price increases, a dynamic that traces back to US export controls on advanced chipmaking equipment — restrictions that have made Chinese firms more dependent on overseas foundries like Samsung, since building equivalent domestic capacity remains constrained by those same controls.
The price increases arrive at a notable moment for Samsung’s foundry division specifically: after posting losses in every year since 2022, the unit contributed to a record quarterly operating profit in the second quarter of 2026, driven largely by strength in AI-related memory alongside improving foundry utilization. Samsung has said it expects continued improvement in the second half of 2026, citing rising factory utilization, better manufacturing yields, and more favorable pricing — with this week’s price hikes being a direct, concrete piece of that story rather than just optimistic guidance.
This foundry pricing news sits inside a much larger memory chip crunch. Counterpoint projects the global memory market will grow from roughly 360 trillion won last year to 1,500 trillion won this year, and on to 2,100 trillion won by 2027 — a trajectory driven almost entirely by AI infrastructure demand for high-bandwidth memory and server DRAM. That surge is squeezing supply available for consumer devices like PCs and phones, as manufacturers reallocate advanced capacity toward the higher-margin AI server market. It’s a similar dynamic to the one driving TSMC’s own blowout revenue growth this year; see our earlier coverage of TSMC’s AI-driven earnings for the parallel story at the industry’s dominant player.
Rising foundry and memory prices don’t stay contained to chip company balance sheets — they flow directly into the cost of building and running every AI system that depends on this hardware, from frontier model training to everyday inference. As compute costs remain a defining pressure on AI company economics in 2026, industry-wide price increases like this one are a leading indicator of where those cost pressures head next, regardless of which company or model is involved.
Samsung’s full second-half 2026 results will show whether this pricing power translates into sustained foundry profitability rather than a one-quarter anomaly. Watch whether TSMC responds with further price increases now that its chief rival has demonstrated real pricing leverage in a capacity-constrained market — a dynamic that would likely push AI infrastructure costs higher across the board.
Sources: Reuters via Yahoo Finance, Cryptonomist, Free Malaysia Today
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