Samsung raises foundry chip prices for Qualcomm, Tesla

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koreajoongangdaily.joins.com, Sept. 29, 2021 – 

Samsung Electronics has notified key clients of price increases of up to 20 percent for contract chip fabrication, following hikes by Taiwanese rival TSMC that are some of the steepest in its history.

"Samsung Electronics sent a notice of unilateral price hikes on chip products last month to include all of its foundry clients -- from Qualcomm and Tesla to smaller local chipmakers," said a sales executive from a Seoul-based chipmaker whose company received the notification.

The source said price increases of up to 20 percent will be charged starting early next year.

"The maximum rate suggested is 20 percent, but specific rates for each company could differ depending on the type of chip after each party negotiates," the source said.

Samsung Electronics manufactures some of the latest Snapdragon chipset designed by Qualcomm while supplying its Exynos processors for Tesla.

A spokesperson for Samsung Electronics declined to confirm.

But the company hinted at a possible hike during a conference call in July, saying extra revenues will be used for investment to boost production of chips.

"[Samsung] will bring the supply prices of its foundry back to normal to ramp up production at the Pyeongtaek complex and expand overall foundry production capacity," said Ben Suh, head of investors relations for Samsung Electronics, during the conference call.

TSMC, the world's largest contract chip manufacturer, will raise prices of its products by 20 percent, according to reports last month.

The hike is likely to be felt in a wide range of electronics products and eventually increase the retail prices of smartphones, cars and home appliances.

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