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Samsung plans to raise prices for semiconductor wafers that power consumer technologies like GPUs and NVIDIA SOCs so that they can be made accessible to expand its S5 Fab factory in Pyeongtaek, South Korea.
Samsung’s S5 Fab Funding Efforts to Raise Prices for Consumer Techs, Including GPUs and SOCs in the Short Term
There is a history with Samsung Foundry being able to achieve their goals in the demand for their manufacture. The hope of placing a production facility in Pyeongtaek will increase production figures relative to the creation of advanced nodes over the next few years.
The downside to the increased costs is that it is speculated that it will adjust the prices of controllers, SoCs, and GPUs made by Samsung Foundry – which include NVIDIA GeForce GPUs.
[Samsung Foundry] accelerate growth by increasing the capacity of the Pyeongtaek S5 line and adjusting prices to allow for future investment cycles …
—Ben Suh, Senior Vice President of Investor Relations, Samsung
Samsung’s 300mm wafer manufacturing plant in Xian, China.
Samsung Foundry’s S5 line of manufacturing facilities are capable of manufacturing and designing wafers using technologies such as the company’s 4LPE and 5LPP modules (4nm and 5nm, respectively). Because manufacturing uses EUV lithography, also known as extreme ultraviolet lithography, Samsung’s expansion creates an increase in manufacturing due to EUV scanners costing between $ 120 million and $ 150 million. In fact, it could potentially be higher than the updated DUV scan. It is possible that Samsung will create additional expense by increasing the cost of its products using the S5 fab.
Samsung is responsible for the extensive production of Exynos SoCs for smartphones for both Samsung Mobile and other mobile smartphone manufacturers, and also creates Ampere GPUs for NVIDIA and other systems-on-chips for other companies.
Increasing costs is not a hasty process. However, one would assume that devices, such as graphics cards, could increase costs exponentially, making some of the best GPUs much more expensive. Semiconductor maker TSMC reportedly decimated customer discounts earlier this year. However, when asked about their position on increasing expansion costs, they say they focus on “short-term gains.”
Rising wafer makers are already operating at full capacity and given the global semiconductor supply crisis, foundries have been raising prices since the start of the year. This is fueled by demand in the cryptocurrency spaces and of course pent-up demand in the gaming industry. We don’t expect this to go away anytime soon and the inflated market could last until the end of 2022.
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