Bad times for shopping, bad times for the PC world, and most importantly, bad times for the end user. The semiconductor industry dominates everything and as such Samsung has a crucial role that impacts the world. The announcement the company just made is failing thousands of businesses, why is it going raise prices?
Rising to invest and compete, Samsung increases the price of its wafers
A Samsung ad was missing after those from Intel and TSMC. The latter two are spending huge sums of money on new Fabs to develop and produce new lithographic processes, or to increase production volume to make up for the shortage of chips.
Samsung has been silent and where Pat Gelsinger was already saying that Intel is not going to increase the prices of its chips (they produce their own wafers and therefore control the price of the whole process) now Samsung is pulling a tangent and intends to finance its New S5 plant in Pyeongtaek through higher income per bracket.
In other words, Samsung must meet the targets demanded by its customers in terms of production and manufacturing of wafers, not to mention the creation of advanced nodes in the years to come, but this investment will not come from the current profits. This means that in order to increase them, they have to increase the price per tranche for all of their customers due to the push from Intel and TSMC.
Will NVIDIA increase the price of its GPUs?
Ben Suh, senior vice president of investor relations at Samsung, slipped in some terse and blunt statements:
Samsung Foundry will accelerate its growth by increasing the capacity of the Pyeongtaek S5 line and adjusting prices to accommodate future investment cycles …
Therefore, it is clear that new EUV scanners from ASML they will not come with lower prices. And therefore, NVIDIA must now decide whether to take the impact of this adjustment and do like Intel in bearing the losses and the costs, or to pass the price increase on to its product line in whole or in part.
AMD surmised the impact TSMC gave it at the start of the year when it decimated discounts for customers with high business volume, but this only seems to be happening in the desktop segment, because as we saw last week, it looks like in the environment things on the server will be different.
What will the new price for NVIDIA GPUs be? The moves will undoubtedly be very interesting and could mark the future of Ampère in the market, where it has lost the advantage in number of GPUs sold and where AMD is fast approaching, especially if the RX 6600 XT ends up being a success.