In the second half of 2022, Samsung plans to increase prices for chip manufacturing services by 15% to 20%. This makes production more expensive given mature technical processes. The company has already settled with some of its customers, with the rest – negotiations are still ongoing, according to Bloomberg, citing sources close to the matter. Samsung declined to comment.

The past year has been quiet for the South Korean giant. Despite raising prices for semiconductor production against the background of competitors’ deficits, Samsung’s prices remained stable. However, in the current realities, he decided to protect himself from the increased risks. The unstable geopolitical situation, new lockdowns in China and rising inflation in the international market are not contributing to successful business. The market is also experiencing an increase in material prices. Bloomberg added that prices for chemicals, gas, as well as silicon wafers and chip-making equipment have increased by 20-30%.

The increase in semiconductor production prices at Samsung facilities will affect smartphone manufacturers, the automotive industry and game console manufacturers. Eventually, end users of these products will have to pay. Remember Samsung and Taiwan Semiconductor Manufacturing Co. (TSMC) accounts for 2/3 of the world’s chip production.

TSMC had previously warned its customers that it plans to increase the cost of its services by 5-8% in 2023. In 2021, the chipmaker has already increased prices by 20%. UMC, another Taiwanese chipmaker, also plans to increase the cost of its services by 4% in the second quarter of 2022. ASML, the world’s largest chip maker from Samsung and TSMC, reported rising labor costs, shortages of materials and components for chip manufacturing, and rising logistics prices last month. The company is not interested in equipment orders and will only be able to close 60% of them by the end of the year.

Bloomberg states that Samsung invested more than $36 billion from rivals last year to upgrade and expand its chip manufacturing capacity. Last year, it overtook Intel to become the largest semiconductor manufacturer by revenue. At the same time, the company said it wants to surpass TSMC and become the world’s largest chipmaker in terms of production. Source