Taiwan Semiconductor’s AI Bottleneck Hands Samsung a Powerful Pricing Opportunity

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Here's a fun twist in the chip wars: the company that's been playing catch-up for years is now the one with the upper hand on pricing. Samsung Electronics (SSNLF) is using stronger AI-chip demand, tighter industry capacity, and improving manufacturing performance to raise prices and strengthen the economics of its foundry business as it works to narrow the gap with Taiwan Semiconductor Manufacturing Company (TSM).

Samsung Raises Prices as Demand Outpaces Capacity

Samsung has increased prices by up to 15% on certain advanced foundry services for new orders, Reuters reported Wednesday, citing people familiar with the matter.

Strong demand from Chinese customers has strained available capacity. However, Samsung must also meet orders from U.S. clients and allocate production capacity to its own chips, limiting its ability to accept all incoming business.

According to the report, Samsung raised prices for its SF4 chips in July by 10% to 15% for customers in China and the U.S., while prices for customers in Taiwan increased by 5% to 10%.

The company also raised prices for SF5 wafers by 10% to 15% and increased prices for older 8-nanometer technology by nearly 10%, the report added.

The pricing gains could help reverse losses in Samsung's foundry business, which industry estimates say has been unprofitable since 2022.

Taiwan Semiconductor Constraints Give Samsung More Pricing Power

Counterpoint said Samsung accounted for 7% of global foundry revenue in the first quarter of 2026, compared with more than 70% for Taiwan Semiconductor.

However, heavy AI demand has consumed much of Taiwan Semiconductor's advanced manufacturing capacity, giving Samsung more leverage with customers seeking alternatives.

BNK Investment & Securities analyst Lee Min-hee told Reuters that Taiwan Semiconductor's tight capacity and higher prices are pushing customers toward Samsung and Intel Corp. (INTC).

Lee believes further price increases could help Samsung's foundry business reach profitability as early as next year, sooner than previously expected.

AI Customers Strengthen Samsung's Foundry Push

The report said Samsung expects advanced processes to generate more than half of its foundry revenue this year, while AI and high-performance computing applications could contribute more than 30%, up from 15% to 20% in late 2025.

Its SF4 production line at Pyeongtaek has been running at full capacity since late last year. Samsung has also secured chip manufacturing agreements with Tesla Inc. (TSLA), Apple Inc. (AAPL) and Broadcom Inc. (AVGO).

NVIDIA Corp. (NVDA) CEO Jensen Huang said Samsung would manufacture NVIDIA's new AI inference processor, while Alphabet Inc.'s (GOOGL) Google is also in talks with Samsung over SF4 production.

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Taiwan Semiconductor’s AI Bottleneck Hands Samsung a Powerful Pricing Opportunity

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Samsung Raises Prices as Demand Outpaces Capacity

Taiwan Semiconductor Constraints Give Samsung More Pricing Power

AI Customers Strengthen Samsung's Foundry Push

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