Samsung’s foundry business could be booming in new chip super-cycle

It’s been a couple of years since the foundry market’s super-cycle came to an end, forcing semiconductor giants like Samsung to cut back their spending. However, the foundry market might be experiencing another super-cycle next year, and foundry businesses are now reportedly preparing to increase prices for their foundry services in anticipation of high demand.

DB HiTek, a chip maker headquartered in Korea, recently decided to increase its contract prices in 2021 by up to 20%, according to new report from the local media. The source claims that the company’s clients have already accepted the price hike because they don’t have many other alternatives.

The looming super-cycle will apparently be driven by a combination of factors, such as the rise of 5G smartphones, the increased demand for autonomous driving solutions, and the fact that fewer companies in China can supply global companies with semiconductor products.

Samsung will reportedly follow DB HiTek’s strategy

Although DB HiTek doesn’t really concern us, the company’s recent actions might ripple across the entire foundry business, as other semiconductor giants will take its example and increase prices for their own services.

Samsung is already planning to increase the price of its 8-inch wafer foundry solution, claims the source citing people familiar with the matter. And Samsung won’t be the only company to do so. SK Hynix is on its way to increasing foundry prices as well.

All things considered, this should mean that Samsung’s foundry business might soon enjoy another period of growth. The company is already manufacturing the Snapdragon 888 SoC using its 5nm production line, and it also won contracts to manufacture IBM and NVIDIA’s latest chipsets.

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