Samsung's contract-based chip prices are set to increase between 15-20% given the level of manufacturing complexity, Bloomberg said, citing people familiar with the matter, adding the new pricing model has been discussed and negotiated with clients.
Samsung's decision comes as the cost of energy, raw materials, equipment, freight, and labor are rapidly soaring. The move was "inevitable," said Masahiro Wakasugi, a Bloomberg Intelligence analyst.
Another component driving the price hikes is the ongoing global chip shortage. Then there are lockdowns in China driving lead times -- the lag between when a semiconductor chip is ordered and delivered -- to 26.6 weeks, a record high.