Samsung, World’s 2nd Biggest Chip Maker Can Increase Price Upto 20%: All Smartphones Will Become Expensive Now?

As the Bloomberg reports on Friday, the Samsung Electronic is planning to hike the prices for chip contract manufacturing by up to 20% this year and for the same, it is in talks with its clients.

Price Hike To Counter Increased Costs

Citing people familiar with the matter, it is said that the move is part of an industry-wide push to raise prices to cover rising materials and logistics costs and is expected to be applied from the second half of this year.

Depending on the level of sophistication, the prices for contract based chip are likely to rise around 15% to 20%.

By the level of sophistication, it is said that the chips produced on legacy nodes are likely to face bigger hikes.

As per the reports, Samsung had completed negotiations with some clients while still in discussions with others.

However, Samsung Electronics declined to comment.

After Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW), Samsung Electronics happens to be the world’s second-largest chip contract manufacturer

Increased Sales Forecast, Chip Crunch

A 37% jump in current-quarter sales has been forecasted by TSMC. It says that amid the global chip crunch, chip capacity to remain very tight this year. This has kept order books full and allowed chipmakers to charge premium prices

In the late April earnings call, Samsung said that the available capacity was less that the demand for its chip contract manufacturing by major customers. It also expects the shortage in the supply to continue.