Samsung has moved to capitalize on AI-driven demand, after reports that it is raising prices by as much as 15% on some of its advanced contract chipmaking.

Filings seen by news outlets also indicate that the South Korean company plans to keep expanding its Pyeongtaek fab complex. The price increases and expansion plans come as Samsung positions itself as an alternative to market leader TSMC, which is already operating at capacity.

Samsung raises chip prices

According to Reuters, Samsung customers began paying higher rates in July, as demand has kept the company’s SF4 line at Pyeongtaek fully utilized since late 2025. The line produces logic chips for customers and base dies for Samsung’s own high-bandwidth memory (HBM).

Prices on the 4-nanometer SF4 process increased by 10% to 15% for Chinese and American buyers.

Prices on the 4-nanometer SF4 process rose by 5% to 10% for customers in Taiwan.

Wafers on the 5-nanometer SF5 line increased by 10% to 15%.

The older 8-nanometer process rose by close to 10%.

Across the board, Samsung’s Chinese customers were the most affected by the revised rates, underscoring how tighter foundry supply is affecting pricing even on mature nodes.

TSMC’s capacity crunch benefits Samsung

Samsung’s price hike follows a chain reaction that began at rival TSMC, which has reached full capacity to meet demand. Every 3-nanometer chip TSMC can produce through 2027 is already paid for. Apple, Nvidia and AMD have also paid for all of TSMC’s 2-nanometer output for 2026.

In the first quarter of 2026, 70% of all money flowing into the foundry market went to TSMC, while Samsung remained far behind the leader with about 7%, according to Counterpoint.

Even so, Samsung has recently gained prominence among fabless designers as the only other foundry currently able to produce 2-nanometer chips.

“As TSMC faces tight capacity and raises prices, customers are shifting to rivals such as Samsung and Intel, prompting Samsung to raise its prices as well,” Lee Min-hee, an analyst at BNK Investment & Securities, said.

Samsung is also moving ahead with expansion plans for Pyeongtaek. Local reports say the company has already filed to expand the core of the site into a “triple-fab” three-story design.

The goal of the expansion is a 1.5x increase in output. The filing still requires approval from the Gyeonggi provincial governor and the Ministry of Land, Infrastructure and Transport.

P5 broke ground in 2022, is scheduled for completion in 2030, and is the largest single semiconductor plant in the world.

AI memory demand drives industry expansion

Demand from AI data centers is behind both the pricing changes and the expansion plans, as chipmakers respond to sustained pressure across foundry and memory supply chains. Counterpoint projects that the global memory market will grow from about 360 trillion won ($258 billion) last year to 1,500 trillion won this year and 2,100 trillion won in 2027.

SK Hynix is also planning new Yongin fabs on the same triple-fab template, reflecting an industry-wide move to build upward as power, water and land become harder to secure.

For Samsung, the pressure is sharpened by a foundry unit that industry estimates have kept in the red every year since 2022. Tom’s Hardware reports that the division still trails TSMC by roughly 11 to 1 in revenue and is operating with 2-nanometer yields near 55%, below the level needed to make advanced nodes profitable.

A $16.5 billion contract to build Tesla’s AI6 processor, signed in July 2025, along with the price increases now taking effect, could help narrow that gap. Samsung also posted a record quarterly operating profit for the second quarter of 2026 on the strength of AI memory and is separately fast-tracking its Yongin chip cluster to 2029.