Samsung Electronics Plunges 7% Despite Quietly Raising Foundry Prices by 15%

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Table of Contents

Samsung Electronics shares plummeted 7% to ₩249,750 during Wednesday’s trading amid widespread semiconductor sector declines across Asian exchanges
Korea’s benchmark KOSPI index plunged over 6%, forcing the Korea Exchange to activate emergency trading halts through its sidecar mechanism
Escalating geopolitical tensions between the U.S. and Iran drove crude prices upward, increasing bond yields and weighing on technology equities worldwide
The company has implemented price increases of up to 15% for cutting-edge foundry services, particularly affecting SF4 and SF5 process technologies
Samsung’s contract manufacturing division, which has recorded losses since 2022, may achieve profitability by 2026 if current pricing trends continue

Shares of Samsung Electronics plunged 7% to ₩249,750 during Wednesday’s session, swept up in a devastating semiconductor sector rout that dragged South Korea’s KOSPI index down more than 6%.

Samsung Electronics Co., Ltd., SMSD.L

Korean exchange officials implemented emergency sell-side sidecar protocols during trading hours, halting automated program trades as institutional investors accelerated their exit from equity positions. The previous day’s session had already witnessed a 1.55% KOSPI decline, ending a six-session rally after institutional traders dumped nearly 785 billion won worth of Korean stocks.

The downturn mirrored significant after-hours losses among U.S. memory semiconductor companies, reflecting a widespread retreat from technology sector investments. Competitor SK Hynix similarly experienced intense institutional selling pressure throughout the trading day.

The catalyst emerged from intensifying tensions between Washington and Tehran. Persistent confrontations near the Strait of Hormuz drove oil prices upward, rekindling concerns about inflation and pushing Treasury yields higher. This market dynamic typically punishes technology stocks trading at elevated valuations.

Compounding the pressure, news surfaced suggesting Washington had requested Seoul prioritize memory chip production facilities in the United States as the cornerstone of a proposed $350 billion investment initiative. While South Korean officials disputed these specific claims, the reports generated additional uncertainty for the country’s semiconductor industry.

Contract Chipmaking Rate Increases Mark Strategic Shift

In a separate development, Reuters disclosed that Samsung has implemented price increases reaching 15% for certain advanced contract manufacturing services on newly placed orders, according to two industry sources.

Manufacturing costs for semiconductors produced using its 4-nanometre SF4 technology climbed 10% to 15% for Chinese and American clients, while Taiwanese customers faced increases ranging from 5% to 10%. Wafers fabricated on its 5-nanometre SF5 platform also experienced 10% to 15% price escalations, and even its mature 8-nanometre technology saw nearly 10% increases.

Chinese manufacturers have demonstrated particular willingness to accept these elevated pricing structures. American export restrictions on sophisticated chipmaking equipment have compelled Chinese companies to depend more heavily on international foundries such as Samsung.

Samsung captured merely 7% of worldwide foundry market revenue during Q1 2026, contrasted with TSMC’s dominant share exceeding 70%. However, with TSMC’s most advanced manufacturing capacity overwhelmingly committed to artificial intelligence chip production, Samsung has acquired unusual pricing leverage within this business segment.

“With TSMC experiencing capacity constraints and implementing price increases, clients are transitioning to alternative suppliers including Samsung and Intel, enabling Samsung to implement its own rate adjustments,” explained Lee Min-hee, analyst at BNK Investment & Securities.

Contract Manufacturing Division Eyes Profitability Milestone

Samsung’s foundry operations have generated losses continuously since 2022. However, analyst Lee indicated that sustained pricing discipline could enable the division to achieve profitability by next year, earlier than previously anticipated.

Samsung’s SF4 manufacturing line located at its Pyeongtaek facility has operated at maximum capacity since the final months of last year. This production line serves clients including Qualcomm while manufacturing base components for Samsung’s proprietary high-bandwidth memory products.

Last July, Samsung formalized a chip manufacturing agreement with Broadcom. Nvidia’s CEO Jensen Huang disclosed in March that Samsung would produce the company’s next-generation AI inference processing unit. Tesla and Apple similarly announced chip production partnerships with Samsung throughout the previous year.

Google is presently engaged in negotiations with Samsung regarding chip fabrication utilizing the SF4 process technology, according to one source knowledgeable about the pricing modifications.

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