Samsung Electronics to up foundry prices by about 20 percent

Samsung Electronics will raise prices for contract chip fabrication following recent price increases by Taiwan's TSMC, which has the largest share in the market.

Samsung Electronics' chip plant in Hwaseong, Gyeonggi [SAMSUNG ELECTRONICS]

Samsung Electronics will raise prices for contract chip fabrication following recent price increases by Taiwan's TSMC, which has the largest share in the market.

The Korean company may up prices by 20 percent, while TSMC is expected to increase rates by single-digit percentages, according to Bloomberg. An increase in the costs of raw materials and chip shortages have been cited.

"Samsung is on a path to up prices of its foundry service," said an executive from a local chip maker. "The price increase started last year as a global shortage of chips continued."

The chipmaker already notified foundry clients of a price increase of up to 20 percent last year, which took effect earlier this year.

The latest price increase is expected to come into effect in the second half.

A spokesperson for Samsung Electronics declined to confirm.

Samsung Foundry produces chips under contract for Tesla, Google and IBM. It manufactures Tensor, a system-on-a-chip designed by Google and used in its Pixel smartphones, and supplies the Exynos processors for Tesla.

Other smaller chipmakers, including UMC, SMIC and GlobalFoundries, may also increase prices since TSMC plays the role of price leader.

TSMC had a 52.1 percent market share in the fourth quarter. Samsung had an 18.3 percent share, according to Taiwan's TrendForce.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]