Samsung has officially announced plans to raise prices on some of the semiconductors it manufactures. The company's hardware solutions are used in a number of third-party products, including NVIDIA. The Korean giant's change of strategy was caused by its desire to finance the expansion of its S5 Fab factory in Pyeongtaek, South Korea.
What is the reason?
High demand creates problems for Samsung Foundry, which cannot produce the necessary number of components for all of its customers. Increasing the production capacity of the Pyeongtaek facility will be of strategic importance to Samsung. The big disadvantage is that the costs have to be balanced by rising production costs.
The current situation in the industry also hinders Samsung's plans. The shortage of components causes additional difficulties in setting up the necessary production. The crisis is limiting companies' capabilities, but Samsung is still hoping to cope with this problem.
What are the consequences?
The Samsung Foludry S5 line is the most advanced product line utilizing Extreme Ultraviolet Light (EUV) technology. The purchase of new EUV scanners will cost $ 120-150 million. One of the most in-demand products right now is the NVIDIA GeForce RTX 3080, and this graphics card will also suffer from Samsung's plans.