TSMC Capacity Tight, Samsung Foundry Raises Prices 15% to Expand Aggressively

Samsung Electronics is leveraging strong AI chip demand, tight industry capacity, and improved manufacturing performance to raise prices and strengthen the economics of its foundry business, narrowing the gap with Taiwan Semiconductor Manufacturing Co.

Samsung Raises Prices as Demand Exceeds Capacity

According to a Reuters report Wednesday, citing sources familiar with the matter, Samsung has raised prices by up to 15% on new orders for certain advanced foundry services.

Strong demand from Chinese customers has exhausted available capacity. However, Samsung must also fulfill orders from U.S. clients and allocate production capacity for its own chips, limiting its ability to take on all new business.

Per the report, Samsung raised prices for its SF4 chips by 10% to 15% for Chinese and U.S. customers in July, while prices for Taiwanese clients were increased by 5% to 10%.

The company also raised prices for SF5 wafers by 10% to 15%, and by nearly 10% for its older 8-nanometer process.

These price hikes could help reverse losses in Samsung's foundry business, which industry estimates show has been loss-making since 2022.

TSMC Capacity Constraints Give Samsung More Pricing Power

Counterpoint said Samsung accounted for 7% of global foundry revenue in the first quarter of 2026, while TSMC held over 70%.

However, robust AI demand has consumed most of TSMC's advanced manufacturing capacity, giving Samsung more leverage in negotiations with customers seeking alternatives.

Lee Min-hee, an analyst at BNK Investment & Securities, told Reuters that TSMC's capacity tightness and rising prices are pushing customers toward Samsung and Intel Corp.

Lee believes further price increases could help Samsung's foundry business turn profitable as early as next year, sooner than previously expected.

AI Clients Strengthen Samsung's Foundry Push

The report said Samsung expects advanced processes to generate more than half of its foundry revenue this year, with AI and high-performance computing applications potentially contributing over 30%, up from 15% to 20% at the end of 2025.

Its SF4 production line in Pyeongtaek has been running at full capacity since late last year. Samsung has also signed chip manufacturing deals with Tesla Inc., Apple Inc., and Broadcom Inc.

NVIDIA Corp. CEO Jensen Huang said Samsung will manufacture NVIDIA's new AI inference processors, while Alphabet Inc.'s Google is also in talks with Samsung for SF4 production.