Samsung plans to raise prices as a whole, up to 20%

Samsung Electronics Co. is in talks with foundry customers to hike semiconductor manufacturing costs by up to 20 percent this year, joining an industry-wide price hike to compensate for rising material and logistics costs.

 

According to the report, the overall price increase is about 15-20%, depending on the complexity of the foundry chips, and the traditional process chips will increase even more. The new pricing will be implemented from the second half of this year, and Samsung has completed consultations with some customers but is still in discussions with others.

 

Samsung declined to comment on the price increase.

 

It is understood that Samsung has maintained a relatively stable pricing strategy in the past 2021. And this year, in the context of high inflation and rising raw material costs, its OEM price rise is not difficult to understand.

 

Samsung's foundry business in 2022 hit a new high. According to the financial report, Samsung's Q1 revenue was 77.78 trillion won (about 61.38 billion US dollars), an increase of 19% from 65.39 trillion won in the same period last year. Among them, the semiconductor (DS) division, which is responsible for the chip business, had a revenue of 26.87 trillion won (about 21.20 billion U.S. dollars) in the first quarter, a year-on-year increase of 39%; while its operating profit was 8.45 trillion won (about 6.67 billion U.S. dollars), a year-on-year increase. An increase of 151.5%.

 

In this regard, Kang Moon-sooo, Samsung senior vice president and head of the foundry market and strategy team, said on the Q1 earnings conference call that Samsung's chip foundry business will continue to improve in the next few years. "If you can see our order book for the next five years, (we expect) the total order book is about eight times our annual revenue in 2021,"