Samsung shares fall 7.8% despite 15% foundry price hike
Samsung Electronics raised foundry prices by up to 15% for advanced nodes in July, citing strong AI demand and capacity constraints at rival TSMC. Despite this pricing power and full production lines at its Pyongtaek plant, Samsung shares fell 7.8% in Seoul on Wednesday, outperforming the broader KOSPI decline of 5.8% but lagging US chip peers. Analysts suggest the price hikes could return the foundry unit to profitability next year, with AI revenue projected to exceed 30% of total foundry income.
*this image is generated using AI for illustrative purposes only.
Samsung Electronics Co. Ltd. (OTC: SSNLF) is increasing prices for its advanced foundry services by up to 15% to leverage strong demand for artificial intelligence chips and tighter global manufacturing capacity. The South Korean tech giant is using this pricing power to improve the economics of its foundry business, which has reported losses since 2022, while narrowing its competitive gap with Taiwan Semiconductor Manufacturing Company Ltd. (NYSE: TSM).
Despite the positive operational developments, Samsung’s Seoul-listed shares tumbled 7.8% on Wednesday as the KOSPI sank 5.8%. This selloff was considerably sharper than moves in US chip stocks, where Broadcom Inc. (NASDAQ: AVGO) fell about 4.5%, Intel Corp. (NASDAQ: INTC) nearly 4%, and Micron Technology Inc. (NASDAQ: MU) nearly 2%. Nvidia Corp. (NASDAQ: NVDA) and TSMC were down less than 1%. Fellow Korean chipmaker SK Hynix Inc. (NASDAQ: SKHY) plunged 9.75% in Seoul before unveiling a 40 trillion won ($28.6 billion) share buyback plan.
Pricing Hikes Across Advanced Nodes
Samsung raised prices for its SF4 chips in July by 10% to 15% for customers in China and the United States. Prices for customers in Taiwan increased by a lower margin of 5% to 10%. The company also implemented a 10% to 15% price increase for SF5 wafers and raised prices for older 8-nanometer technology by nearly 10%. These adjustments reflect strained available capacity due to strong demand from Chinese customers, alongside the need to allocate production to US clients and Samsung’s own chip requirements.
| Node/Technology | Price Increase Range | Customer Region |
|---|---|---|
| SF4 | 10% to 15% | China, US |
| SF4 | 5% to 10% | Taiwan |
| SF5 | 10% to 15% | Global |
| 8nm | Nearly 10% | Global |
Market Share and Capacity Constraints
Counterpoint Research data indicates that 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 greater leverage with customers seeking alternative suppliers. TSMC CEO C.C. Wei told analysts last month that the gap between demand and supply is “so big” the company is racing to narrow it.
BNK Investment & Securities analyst Lee Min-hee noted that Taiwan Semiconductor’s tight capacity and higher prices are pushing customers toward Samsung and Intel. Qualcomm Inc. (NASDAQ: QCOM) already uses Samsung’s SF4 line, while Samsung manufactures Nvidia’s new AI inference processor on its 4nm process. Tesla Inc. (NASDAQ: TSLA) signed a roughly $16.5 billion chipmaking deal with Samsung last year, and Alphabet Inc.’s (NASDAQ: GOOGL) Google is reportedly in talks to use SF4.
What the Numbers Show
The divergence in market share versus pricing power highlights a structural shift in the foundry landscape. While Samsung holds only 7% of global foundry revenue compared to Taiwan Semiconductor’s dominant 70%, the latter’s capacity constraints are creating immediate opportunities for the smaller player. This dynamic allows Samsung to implement significant price increases (up to 15%) on advanced nodes, suggesting that supply scarcity is currently outweighing brand share in driving short-term foundry economics. Investors are questioning the scale of AI spending even as chipmakers struggle to keep up with it, reflected in the sharp stock decline despite operational wins.
Profitability Outlook and Customer Wins
Lee Min-hee believes further price increases could help Samsung’s foundry business reach profitability as early as next year, sooner than previously expected. Samsung expects advanced processes to generate more than half of its foundry revenue this year. AI and high-performance computing applications are projected to contribute more than 30% of foundry revenue, up from 15% to 20% in late 2025.
The company’s SF4 production line at Pyongtaek has been running at full capacity since late last year. Demand from China is so strong that Samsung cannot fill every order because it must reserve capacity for U.S. customers and its own HBM base dies. Prediction markets point to continued expansion, with Kalshi traders giving a 52% chance that the U.S. ends 2026 with at least 5,400 active data centers, roughly 25% above the market’s June 1 baseline of 4,313.
Will Samsung's aggressive 15% price hikes on advanced nodes risk alienating key customers like Google and Qualcomm to competitors like Intel or TSMC as capacity constraints ease?
How might the U.S. government's allocation mandates for Samsung's capacity impact its ability to capture the full revenue potential from high-demand Chinese AI chip orders?
Can Samsung realistically achieve foundry profitability by next year given the historical capital intensity of competing with TSMC's economies of scale?
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