Significant price increase: Samsung & TSMC want more money from foundry customers


A new round of prices for contract manufacturers is in the offing. TSMC is said to increase this for many nodes, with Samsung it will be even worse. Because if TSMC is talking about a maximum of eight percent in the coming year, Samsung is even talking about 20 percent. And that although they are still lagging behind the market leader.

High purchasing costs lead to price increases

The spiral of rising purchase prices for materials – 20 to 30 percent are mentioned here – which ultimately lead to higher production costs, are ultimately passed on by contract manufacturers, like all companies, to their customers. At TSMC, a five to eight percent surcharge is mentioned, which would be a rather clear price increase compared to the last few years, because in 2021 the average price there is said to have climbed by around 20 percent. But there is always something unclear about which production branches and manufacturing steps these ultimately apply to, at TSMC there are now a confusing number of them.

For Samsung, a flat rate of 15 to 20 percent is higher Added pricing for Foundry customers. Here, too, it depends on the selected product level, but probably also on the appropriate contracts with the customers.

Until recently, Samsung was considered to be significantly cheaper than TSMC, which was also due to the fact that it was and still is a much smaller foundry with usually more of the second best production. Even the latest attempts to saw the throne of TSMC were rather clear with a tendency to fail, massive problems with the yield put a spanner in the works. However, this is probably not a thorn in the side of many customers in every area, since many have designed the contracts for functional chips and do not accept every wafer across the board. In the end, Samsung is stuck with the costs, customers like Nvidia and Qualcomm, who are said to have such contracts, struggle at most with too few units.

Recently, the problem reports have been piling up again at Samsung, the 4 nm process runs poorly, there are also problems with the new 3GAA. At least here something seems to have been cleaned up, Taiwanese media are reporting progress in the first manufacturing process with Gate-All-Around. Samsung intends to produce the first chips this quarter, and Samsung will probably be the launch customer once again.