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Samsung Considering Increasing Chip Manufacturing Price By 20 Percent

Samsung is the 2nd largest semiconductor contract producer globally, coming in second place behind Taiwan Semiconductor Manufacturing Co. (TSMC).

Samsung Considering Increasing Chip Manufacturing Price By 20 Percent

Samsung Electronics is reportedly in discussions with customers about increasing the costs of semiconductor contract manufacturing by as much as 20% this year.

The modification, which is expected to take effect in the second half of this year, will be a part of an industry-wide drive to boost pricing to meet escalating expenses related to materials and transportation.

The cost of contract-based chips is expected to increase between 15% and 20%, depending on sophistication. Chips made on older nodes are likely to see higher increases. Samsung has finished agreements with certain clients, while talks with others are still ongoing. The representatives from Samsung Electronics declined to comment. 

The firm is the second-largest semiconductor contract producer globally, coming in second place behind Taiwan Semiconductor Manufacturing Co. (TSMC). It expects a 37% gain in sales for the current quarter, citing a global chip scarcity that has kept order books full and allowed chipmakers to demand higher prices.

During the earnings report that Samsung released at the end of April, the company stated that the demand for their chip contract production was greater than the available resources and that the supply shortage would continue.

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