Samsung Seeking To Increase Its Chip Prices

Samsung is reportedly in contact with its clients to increase the contract chip manufacturing prices as the global shortage continues.

Chip shortage has caused a lot of damage to different sectors, and the problem still continues without any prospects. Intel’s CEO recently asserted that the chip shortage could even remain until 2024. Samsung, the second-largest chip contract manufacturer in the world, is now looking to increase its chip prices by 20 percent later this year.

Samsung has completed talks with some customers about the new prices and is now negotiating with the remaining customers. At the moment, the demand for chips has exceeded the supply, which is one of the reasons for the global chip shortage. The manufacturing capacity is not enough to meet the demands, and semiconductor companies have no choice but to invest in building new plants, just like what Intel is doing in Germany.

All semiconductor companies raise their prices

Of course, the increase in logistics and materials costs could justify Samsung’s decision. And Samsung is not the only chip manufacturer that aims to increase contract chip manufacturing prices. Another major semiconductor player Taiwan’s TSMC, is also planning to increase its prices by 6 percent in 2023.

Samsung has started to increase its manufacturing capacity and build new plants. The Korean company is building a $17 billion chip manufacturing plant in Texas. It is also in contact with the White House to find a solution for the never-ending chip shortage.

One main reason for the global chip shortage is the widespread use of chips in various industries. It is not just manufacturers of electrical devices such as smartphones, tablets, and computers that use chips in their products. Car manufacturers are also one of the biggest users of chips.

The global chip shortage even decreased car shipments for various companies. Also, BMW has recently announced some of its vehicles will head to the market without Android Auto or Apple CarPlay due to the ongoing chip shortage.