Samsung Foundry Considering up to 20 Percent Price Hikes

[lexluthermiester]

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.

To be fair, I'm talking about Samsung as a company and referring to their public disclosures. However, if the foundry was not operating at the similar profit level to parent company, such would have been remarked in the last report, which it wasn't. My conclusion, based on that info, is that the parent company is being greedy and forcing the foundry to increase prices to increase profit.

 

[DeathtoGnomes]

I used to follow several corporations profit margins, seems the larger corporations usually figure out to be about 12%. Samsung didnt disclose how much of that 15% increase actually pays for increased expanses. So lets say profit is already planned to be 12% planned, increasing 15% would bump the margin from 12% to 14%, I'm not sure thats being greedy, but, and reaching a bit, what if it could be that Samsung wants to increase its P/E ratio? its currently holding at 11.5-ish, investors like that.

 

[Deleted member 24505]

I used to follow several corporations profit margins, seems the larger corporations usually figure out to be about 12%. Samsung didnt disclose how much of that 15% increase actually pays for increased expanses. So lets say profit is already planned to be 12% planned, increasing 15% would bump the margin from 12% to 14%, I'm not sure thats being greedy, but, and reaching a bit, what if it could be that Samsung wants to increase its P/E ratio? its currently holding at 11.5-ish, investors like that.

2% of 100 is 2, 2% of a billion is what? so a 2% profit increase for them could in fact be a great deal.

 

[DeathtoGnomes]

2% of 100 is 2, 2% of a billion is what? so a 2% profit increase for them could in fact be a great deal.

i dont disagree. How it looks is a matter of perspective, using percentage or actual dollar amount in PR statements changes from corporation to corporation. I guess it depends on what looks less scary in a PR statement is what they go with. Does saying 2% look better than saying 200million? Its all about perspective.

EDIT: 2% to a multi billion corporation looks quite different than 2% to a 800 million dollar company.

 

[Assimilator]

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.

Nothing peculiar about it, since the highest demand for microchips is coming from the automotive and industrial sectors who almost exclusively use these older nodes because they don't give a shit about efficiency nor need higher transistor counts. Previously there was always enough spare foundry capacity for the companies in these industries that they didn't need to reserve any, so they didn't bother; then COVID hit and those companies woke up to the reality that there was now no spare capacity available, so they wouldn't be getting any more chips. Hence the plethora of chip shortages we've seen for appliances and vehicles.

The affected industries are obviously unwilling to repeat this mistake, so now they're rushing to sign ironclad capacity contracts with the foundries. Which puts said foundries in a very strong negotiating position that they're very happy to take advantage of - because over and above profits, the costs of investing into cutting-edge node capacity is ever-increasing.

 

[catulitechup]

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

yeah this fucking scumbags companies never lost still with inflation, them always win and normally use like a excuse for more profit