Samsung Electronics has raised prices for advanced contract chipmaking services by up to 15% on new orders, Reuters has reported, as surging AI chip demand tightens capacity in a foundry business long dominated by TSMC. Demand increase in July hit Samsung’s 4 nm SF4 process hardest, with Chinese and US customers absorbing rises of 10%-15% in a single month, against 5%-10% for customers in Taiwan, TSMC’s home market.

Samsung’s 5 nm SF5 wafers rose by a similar 10%-15%, while its older 8 nm technology increased nearly 10%. Tthe company’s SF4 production line at its Pyeongtaek plant in South Korea has been running at full capacity since late 2025, supplying logic chips to Qualcomm alongside base dies for Samsung’s own high-bandwidth memory products. Samsung declined to comment to Reuters either way.

Chinese customers have accepted the steepest increases of any market, even though Samsung cannot fulfil every order given its existing obligations to US customers and its own internal chip needs. However, that willingness to pay more illustrates how US restrictions on exporting advanced chipmaking equipment to China have pushed Chinese firms to rely more heavily on foreign foundries, effectively channelling part of the pressure the US has placed on China’s domestic chip sector into revenue for a rival Asian manufacturer.

The increases mark a significant turnaround for a foundry division that has lost money every year since 2022 and has long trailed Taiwanese counterpart TSMC, which commanded more than 70% of global foundry revenue in Q1 2026 against Samsung’s 7%. BNK Investment & Securities analyst Lee Min-hee attributed Samsung’s newfound pricing power directly to TSMC’s own capacity constraints: “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.” She added that continued increases could return the foundry business to profit “as early as next year, earlier than previously expected”.

Automotive customers have served a meaningful role in that recovery. Samsung signed a US$16.5bn, eight-year deal in 2025 to manufacture Tesla’s next-generation AI6 chips at its Texas facility, chips that will power the automaker’s autonomous driving systems and planned humanoid robots. Meanwhile, BYD has held separate talks with Samsung about producing future autonomous driving chips. Samsung also supplies infotainment and connectivity processors to BMW, Volkswagen, Hyundai and Ferrari, giving it exposure across both cutting-edge AI silicon and higher-volume automotive electronics.

However, that leverage may not last indefinitely, given that it stems directly from customers unable to secure allocation at TSMC rather than from any independent shift in Samsung’s competitive position. TSMC is already investing tens of billions of dollars to expand its own capacity, a process that will take years but could eventually ease the bottleneck currently working in Samsung’s favour. Samsung expects advanced process nodes to generate more than half of foundry revenue this year, with AI and high-performance computing applications alone accounting for over 30%, up from 15% to 20% in late 2025.

Samsung’s foundry turnaround, in other words, rests on a combination it does not fully control: a temporary TSMC bottleneck it is exploiting for pricing power, and Chinese customers—automotive and otherwise—whose options have narrowed because of a geopolitical dispute they did not create. Either of these could shift well before Samsung’s own capacity or automotive relationships mature into a durable competitive position.