Samsung Electronics is expected to raise its foundry prices similar to the recent price hike from TSMC. The news arrives as the recent surge in demand has overtaken the supply and massive investment that is required to keep up with the increased production.
According to a KedGlobal report, major foundries are hiking prices due to the sizeable demand that has hurt profitability since a large sum of investment is needed to expand existing production capacities. So recently, the world’s largest contract chipmaker, TSMC (Taiwan Semiconductor Manufacturing Co.) had decided to ramp up prices on its products by about 20 percent, as per local reports. Similarly, the third largest foundry, UMC (United Microelectronics Corp) is also planning on hiking its prices in September, November, and even early next year as well.
The Taiwanese chipmakers have already increase the prices by about 10 to 20 percent in the first half of this year. And now, it seems that the South Korean tech giant is also planning on following suit. The world’s largest memory chipmaker’s vice president Suh Byung-hoon added that “We will rationalize foundry prices,” after it announced its earnings in the second quarter of this year. Furthermore, the brand also expected revenue from its foundry business unit to rise more than 20 percent this year.
Seoul National University’s professor Jaeyong Song expects that the price hike will arrive in the fourth quarter of this year. Song further added that “Samsung’s production line is so full that it outsourced production of some application processors for Galaxy.” The industry is expecting these prices to remain high until major foundries complete their planned capacity expansions that began due to the massive demand.
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