Samsung Foundry Considering up to 20 Percent Price Hikes

[TheLostSwede]

Earlier this week, news about TSMC increasing prices in 2023 made its way online and now Samsung Foundry is said to be discussing price hikes with its customers to make up for the increased costs in materials. TSMC already increased its prices by around 20 percent at the end of 2021 and now it looks like Samsung Foundry is set to follow suit with a similar price hike. Depending on the node, the company is said to be looking at increases of between 15 to 20 percent. The somewhat peculiar thing in the case of Samsung Foundry, is that the company is looking at asking for more money on older, legacy nodes, than it will for its cutting edge nodes.

The price increases are said to come into effect sometime in the second half of 2022, so more than six months after TSMC's price hike. The company is still in negotiation with some of its customers, while others have already come to an agreement with Samsung Foundries. The costs to produce chips are said to be increasing by 20 to 30 percent across the board, no matter if we're talking materials needed to produce integrated circuits, or building new factories, according to Bloomberg. Samsung Foundries have also managed to secure long-term orders for the next five years, with a combined value of around eight times that of previous year's revenue, according to its EVP, Kang Moon-soo. The company is hoping to overtake TSMC in the future and invested more than US$36 billion in 2021 alone to expand its foundry business with new fabs and EUV machines. The good news is that Samsung Foundry claims to be back on track when it comes to yield on its 4 nm node and mass production of its 3 nm node is said to start this quarter.



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[Quicks]

The sooner we have more players in this field the better. Samsung & TSMC posts huge profits each year, but raises prices 20%, they are getting greedy plain and simple. They can easily absorb most of the costs or just raise it by 5% and probably not affect their profits at all.

 

[TheLostSwede]

The sooner we have more players in this field the better. Samsung & TSMC posts huge profits each year, but raises prices 20%, they are getting greedy plain and simple. They can easily absorb most of the costs or just raise it by 5% and probably not affect their profits at all.

You might want to look at how much both companies are re-investing in equipment, new fabs etc.
They might be making record profits, but they're also re-investing record amounts to keep bringing out new nodes on a regular basis, so the entire premise for how we improve the performance of ICs can continue.
More players wouldn't solve this.

 

[chrcoluk]

You might want to look at how much both companies are re-investing in equipment, new fabs etc.
They might be making record profits, but they're also re-investing record amounts to keep bringing out new nodes on a regular basis, so the entire premise for how we improve the performance of ICs can continue.
More players wouldn't solve this.

If I am not mistaken Profits on financial statements will have investment already taken into account?

 

[TheLostSwede]

If I am not mistaken Profits on financial statements will have investment already taken into account?

Most likely yes.
I didn't end up writing it up, but there were figures of what the two head honchos at TSMC were making in terms of salary and it's just north of US$14 million a year.
That might sound like a whole ton of cash to most of us, but Pat over at Intel earned US$176.8 million last year...
I guess TSMC is putting their money back into the business, rather than blowing it on its executives.

Intel CEO earned 1,711 times more than average company worker in 2021

Intel Corp Chief Executive Officer Pat Gelsinger earned 1,711 times as much as the average worker at the U.S. chipmaker in just 11 months since he joined in February last year, a regulatory filing showed on Wednesday.

www.reuters.com

 

[Chaitanya]

Most likely yes.
I didn't end up writing it up, but there were figures of what the two head honchos at TSMC were making in terms of salary and it's just north of US$14 million a year.
That might sound like a whole ton of cash to most of us, but Pat over at Intel earned US$176.8 million last year...
I guess TSMC is putting their money back into the business, rather than blowing it on its executives.

Intel CEO earned 1,711 times more than average company worker in 2021

Intel Corp Chief Executive Officer Pat Gelsinger earned 1,711 times as much as the average worker at the U.S. chipmaker in just 11 months since he joined in February last year, a regulatory filing showed on Wednesday.

www.reuters.com

So Intel is typical Western business wasting money on top management, whose job is to bad mouth their competitors in front of press and government instead.

 

[Mindweaver]

They can hike it as much as they want too. We as consumers just need to not buy it and for some buying won't be an option. Everything has been increasing and it will all come down to the Cans and Can'ts... people that can afford it and people who can't. I'd say there is a lot more can'ts then cans. Which in the long run will naturally lower prices, but for how long who knows.

 

[Deleted member 24505]

Most likely yes.
I didn't end up writing it up, but there were figures of what the two head honchos at TSMC were making in terms of salary and it's just north of US$14 million a year.
That might sound like a whole ton of cash to most of us, but Pat over at Intel earned US$176.8 million last year...
I guess TSMC is putting their money back into the business, rather than blowing it on its executives.

Intel CEO earned 1,711 times more than average company worker in 2021

Intel Corp Chief Executive Officer Pat Gelsinger earned 1,711 times as much as the average worker at the U.S. chipmaker in just 11 months since he joined in February last year, a regulatory filing showed on Wednesday.

www.reuters.com

There is no job on this planet that deserves 14 mil a year, nevermind 176. These kind of wages are a piss take with the state of the world now.
The sooner we destroy ourselves the better

 

[Zareek]

There is no job on this planet that deserves 14 mil a year, nevermind 176. These kind of wages are a piss take with the state of the world now.
The sooner we destroy ourselves the better

I agree wholeheartedly on the executive compensation, it's pure madness!

Professional athletes too, pure insanity...

 

[eidairaman1]

They can hike it as much as they want too. We as consumers just need to not buy it and for some buying won't be an option. Everything has been increasing and it will all come down to the Cans and Can'ts... people that can afford it and people who can't. I'd say there is a lot more can'ts then cans. Which in the long run will naturally lower prices, but for how long who knows.

I jumped ship to Motorolla and my next SSDs will be by Crucial.

Samsungs Appliances are garbage as well.

 

[bonehead123]

And NOW we know who is paying for all those new fabs, not to mention those new yachts, beachside villas, hunting lodges, lear jets etc etc......

 

[R-T-B]

I jumped ship to Motorolla

Owned by Lenovo, using what is most likely tsmc produced chips?

And NOW we know who is paying for all those new fabs, not to mention those new yachts, beachside villas, hunting lodges, lear jets etc etc......

Well no duh we were gonna pay for them. We also are the chief benificiary of having them...

 

[mechtech]

Interesting,

In all honesty, if GF wafers are cheaper I would take it from them and pay the extra electricity for 14/12nm.

 

[Arpeegee]

Just funny to see that Samsung thinks it can increase prices when their chip manufacturing has been known to have major issues and losing huge customers in the past couple years.

Maybe it's more for lost revenue than it is profit?

 

[DeathtoGnomes]

Most likely yes.
I didn't end up writing it up, but there were figures of what the two head honchos at TSMC were making in terms of salary and it's just north of US$14 million a year.
That might sound like a whole ton of cash to most of us, but Pat over at Intel earned US$176.8 million last year...
I guess TSMC is putting their money back into the business, rather than blowing it on its executives.

Intel CEO earned 1,711 times more than average company worker in 2021

Intel Corp Chief Executive Officer Pat Gelsinger earned 1,711 times as much as the average worker at the U.S. chipmaker in just 11 months since he joined in February last year, a regulatory filing showed on Wednesday.

www.reuters.com

Pat Gs pay is 79% stock options, thats roughly 35 million base pay.

with stock awards making up nearly 79% of his total compensation,

 

[Bomby569]

Good for them. Supply and demand. It's not their fault the market is what it is. In fact they are the ones making it what it is.

 

[stimpy88]

Samsung's photocopiers have seen a firmware upgrade from simply copying other companies products and marketing, to now copying their prices too!

 

[Mindweaver]

I jumped ship to Motorolla and my next SSDs will be by Crucial.

Samsungs Appliances are garbage as well.

I just 2 Crucial 1BT SATA SSD's not to long ago for 64 USD and really like them. Of course I just bought 2x Samsung M.2 980 drives when the price was sub 100 USD. I'm still on an Galaxy S10 Plus, but it's getting long in the tooth.. lol I don't know if I'll go Samsung on my next phone. The company I work for pays for that though. I agree Samsung appliances are garbage.

 

[Legacy-ZA]

And NOW we know who is paying for all those new fabs, not to mention those new yachts, beachside villas, hunting lodges, lear jets etc etc......

Oh yes, and don't worry, they don't have to lower their carbon footprint at all, they can just preach and force regulations, IDs, and laws on us to force us to comply, this while they live the high life.

 

[dicobalt]

Okay, let's get on with it, time for the courts to bring round 100 of DRAM price fixing charges and then make the price fixing totally worth it with a small fine as the only consequence. This is how a functioning society works you know.

 

[SOAREVERSOR]

Asian companies and mega corps do not inflate their executives pay to the same extent American companies do. Also nobody can claim Samsung and TSMC aren't investing in themselves.

 

[lexluthermiester]

Depending on the node, the company is said to be looking at increases of between 15 to 20 percent.

There is but one word to describe this: Greed. How sad..

 

[TheLostSwede]

There is but one word to describe this: Greed. How sad..

Are you saying that companies should eat the difference in cost for everything from electricity to materials and more expensive equipment?
Inflation is what it is as long as we're continuing on the path of capitalism.

 

[lexluthermiester]

Are you saying that companies should eat the difference in cost for everything from electricity to materials and more expensive equipment?
Inflation is what it is as long as we're continuing on the path of capitalism.

There is a difference between raising prices to account for an increase in cost and jumping prices by 15%+, especially when Samsung is operating at very high profit levels. This isn't anything other than opportunistic greed.

 

[TheLostSwede]

There is a difference between raising prices to account for an increase in cost and jumping prices by 15%+, especially when Samsung is operating at very high profit levels. This isn't anything other than opportunistic greed.

What profit levels are Samsung Foundry operating at, since you seem to have some insider knowledge here?
Keep in mind that we're talking a subsidiary here and not Samsung Electronics.