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Samsung raises semiconductor prices: what the effects will be

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Samsung Electronics wants to cut prices for the semiconductors it produces on a contract basis. The increase would be somewhere around 20% this year.

According to Reuters, the measure would be implemented in the second half of this year. The project is part of an industry-wide effort to raise prices to cover the rising costs of materials and logistics. Thus, the prices of contract-manufactured chips could increase by about 15% to 20%, depending on the level of sophistication. The tech giant has concluded negotiations with some customers, and they are still in talks with others.

Samsung products are getting more expensive

According to the same source, Samsung Electronics declined to comment. As a reference, the company is the second largest chip manufacturer in the world, after Taiwan Semiconductor Manufacturing (TSMC). Samsung is a huge player in the semiconductor industry, producing processors for a wide range of industries, as well as memory products, storage solutions and foundry solutions that enable the manufacture of other semiconductor products. Adding a price increase of up to 20% in all these sectors will inevitably lead to higher prices for any product that uses Samsung components.

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Samsung is committed to building a chip factory in Texas just as the United States began pushing for more semiconductor production in the country last year.

The Korean technology giant said at the time that it would invest $ 17 billion in the new unit, which would produce state-of-the-art and advanced chips for smartphones, 5G and artificial intelligence, among other applications. Construction of the plant is scheduled to begin this year, while production at the unit is expected to begin in the second half of 2024.

The US government has taken steps to stimulate the production of semiconductors in the US, following the global shortage of chips caused by closed installations and the high demand for computers and other devices during the pandemic. This problem continues to have a huge impact on all industries – car manufacturers such as GM and Ford have been forced to suspend or reduce production in their US factories due to supply constraints.

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