Samsung Electronics could benefit from TSMC‘s price hikes: Industry

[Graphics by Song Ji-yoon]

The potential price hikes by Taiwan Semiconductor Manufacturing Co. (TSMC) and other Chinese foundry companies could allow Samsung Electronics Co. to gain a competitive edge on prices, according to industry sources.

Citing rising costs, TSMC Chairman C. C. Wei noted the need for a price hike during the company’s shareholders‘ meeting on June 4. Nvidia Corp. CEO Jensen Huang also echoed the view, saying that manufacturing prices are too low.

Industry observers expect TSMC to increase its prices in the second half of 2024. Taiwan’s media reported that TSMC‘s 3-nanometer process order book is full up until 2026, with prices expected to rise by more than 5 percent. The price for chip-on-wafer-on-substrate (CoWoS) is also anticipated to increase by as much as 20 percent.

Some suggest that Samsung Electronics could benefit from the potential hike, as some customers may switch from TSMC to the Korean chip giant.

“Samsung Electronics is the only alternative foundry to TSMC,” said Ahn Ki-hyun, executive director of the Korea Semiconductor Industry Association.

As TSMC witnesses its factory utilization rate climb up to 100 percent, more customers are expected to outsource production to Samsung Electronics.

“With the rate likely to reach 100 percent, customers will inevitably need to diversify some of their volumes,” said Park Sang-woo, an analyst at Shinyoung Securities Co.

Samsung Electronics, however, is likely to focus on its gate-all-around (GAA) process or turnkey strategies rather than on short-term factors such as price and utilization rates. The tech giant also touted itself as the world’s only chip company to offer cutting-edge architecture so far.