Samsung raises prices for circuit manufacturing – customers will finance investments

The circuit manufacturers that offer the most advanced nodes are few, but provide a plethora of companies with manufacturing resources. During the week, Intel shared information about the plans for the newly opened contract manufacturing, where broad licensing libraries and cutting-edge technology for manufacturing and packaging attract customers such as Amazon and Qualcomm. In connection with the presentation of the quarterly report, Samsung is now adding news, which in the long run means a gloomy forecast for consumer electronics.

And foundry will accelerate growth by expanding Pyeongtaek S5 Line capacity and by adjusting pricing to enable future investment cycles. – Ben Suh, chef för Samsungs investerarrelationer

The company explains that they intend to raise prices for production, to finance future investments and in the near future expansion of the production line S5. This is responsible for 5- and 4-nanometer technologies, which constitute the manufacturer’s most advanced range. Samsung, for example, manufactures its own system circuit family Exynos on just 5-nanometer technology with EUV lithography.

Circuits and architectures usually have to be designed specifically to fit a manufacturer’s nodes, which is why several players are dependent on Samsung. With smaller transistor-tight 8 nanometers, Nvidia’s graphics circuitry is produced, which can be seen under the shell of the Geforce RTX 3000 series, but even such products will thus get a slap in the face from the price-increasing ladle in due course. Tom’s Hardware points out that agreements between customers and manufacturers, however, mean that Samsung can not raise prices with immediate effect.

Furthermore, Tom’s Hardware explains that more contract manufacturers have looked at pricing in the footsteps of the shortage of circuits, where, for example, TSMC is said to have fumbled quantity discounts. It is unclear how much Samsung’s prices will be increased, but in products where the circuits make up a large part of the manufacturing cost, it is reasonable that the final price is also turned up. Thus, the future will show whether, for example, the target prices for the Geforce RTX 3000 series are adjusted, and whether this in turn affects the even higher real prices.

Source: Samsung via Seeking Alpha

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