South Korean giant Samsung Electronics has taken a significant step in its strategy to revive its contract chip manufacturing business. The company has implemented a price increase of up to 15% on some of its advanced foundry services, a move that directly addresses the imbalance between available supply and soaring demand driven by artificial intelligence. This decision, which affects new orders for the most in-demand nodes, has been interpreted by the market as a sign that the company is beginning to gain real pricing power in a sector dominated by TSMC.
The news had an immediate effect on the markets. Shares in Samsung Electronics surged more than 9% on Thursday, recovering from the previous day's decline, after the extent of the price increases became clear. The stock reached 273.000 won before stabilizing around 269.500. This upward movement reflects investor confidence that the foundry division, which has been loss-making for years, can finally turn its profitability around thanks to a combination of increased factory utilization and more favorable prices.
Price increases in the 4, 5 and 8 nanometer nodes
According to information published by Reuters, the price adjustments were implemented in July and primarily affect new orders manufactured using the 4-nanometer SF4 node. Customers in China and the United States have seen increases of between 10% and 15% compared to the previous month, while buyers in Taiwan have experienced more moderate increases of between 5% and 10%. The company has also raised prices on 5-nanometer SF5 node wafers by a similar proportion, and products manufactured using its older 8-nanometer technology have increased by almost 10%.
This price increase is no coincidence. Samsung's SF4 production line at its Pyeongtaek plant in South Korea has been operating at full capacity since the end of last year . There, logic chips are manufactured for external clients such as Qualcomm, in addition to the base dies that Samsung itself uses in its HBM memory chips, an essential component for artificial intelligence systems. The inability to fulfill all incoming orders, especially from China, has led the company to prioritize its most strategic clients and raise prices for new contracts.
Capacity shortages in the industry boost Samsung's bargaining power
The market context is working in Samsung's favor. Massive investment in AI infrastructure has absorbed much of the most advanced manufacturing capacity of TSMC, the undisputed industry leader. With TSMC's capacity becoming increasingly limited, customers are looking for alternative sources , and Samsung has become a viable option, albeit still far behind in market share. According to Counterpoint Research, Samsung controlled approximately 7% of global foundry revenue in the first quarter of 2026, compared to over 70% for TSMC.
Price pressures also stem from demand dynamics themselves. Chinese customers, facing US restrictions on accessing advanced semiconductor manufacturing equipment, have increased their reliance on foreign foundries. These companies are willing to pay higher prices to secure capacity , allowing Samsung to implement price increases without losing orders. However, the company cannot meet all the demand it receives, as it must balance third-party orders with its own internal production needs for memory and other components.
The foundry division could become profitable again sooner than expected
Samsung's foundry division has been accumulating losses since 2022, and its recovery has been hampered by the enormous market share gap with TSMC. However, analysts are beginning to see light at the end of the tunnel. Lee Min-hee, an analyst at BNK Investment & Securities, has indicated that if Samsung continues to raise prices, its foundry business could become profitable as early as next year , sooner than initially anticipated. This possibility depends on the price increases not reducing demand, on improved utilization rates, and on the company maintaining the progress made in process efficiency.
The company has already informed investors that it expects its foundry division to return to profitability in the near future. The main drivers are improved factory utilization, performance gains, and stronger average selling prices. AI is playing an increasingly important role in Samsung's sales : the company anticipates that cutting-edge nodes will generate more than half of its foundry revenue this year, and that AI and high-performance computing applications will account for more than 30% of the total, roughly double the figure projected for the end of 2025.
New clients and strategic agreements
Improved manufacturing yields have also helped Samsung attract new customers. Tesla and Apple announced chip manufacturing agreements with Samsung last year , as Apple explores Samsung's chip manufacturing options , and in July the company revealed an agreement with Broadcom to produce semiconductors for AI. Furthermore, Nvidia CEO Jensen Huang stated in March that Samsung would manufacture the company's new AI inference processor, a significant boost to the company's credibility in the industry. Google is also in talks with Samsung to manufacture chips using its SF4 process, according to sources.
These agreements increase Samsung's visibility within the AI ​​supply chain, but also put greater pressure on the company to meet the deadlines and quality standards demanded by top-tier clients. Expanding capacity will need to be accompanied by technical improvements and careful resource management , especially as the shift to 2nm chips shapes the future of the industry. The company declined to comment on the price increases, so the exact scope of each contract and the negotiated terms remain unconfirmed.
The episode confirms that the race for artificial intelligence infrastructure is already directly impacting the manufacturing prices of the most advanced semiconductors. The combination of intense demand, fully utilized capacity, and customers willing to pay more could transform a loss-making division into a profitable business , although the outcome will depend on Samsung's ability to convert market pressure into lasting efficiency. Meanwhile, the gap with TSMC remains considerable, but current dynamics suggest that Samsung is gaining ground in a sector where every percentage point of market share counts.
