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first_img Samsung's advanced foundry prices rise by up to 15%, driven by AI demand boosting capacity

According to Reuters, citing informed sources, Samsung Electronics has raised prices for some new advanced foundry service orders by up to 15%, due to a surge in demand for AI chips leading to tight capacity. The company has long lagged behind TSMC in the foundry sector. Demand from Chinese customers is particularly strong, but Samsung must prioritize serving U.S. customers and reserve some capacity to support its own chip production, making it unable to take on all orders. Affected by U.S. export restrictions on advanced chip equipment to China, Chinese companies are increasingly reliant on overseas foundries, with some Chinese customers accepting the maximum price increase.Informed sources stated that Samsung raised the prices for the 4nm (SF4) process in July, with price increases of 10% to 15% for Chinese and U.S. customers, and 5% to 10% for Taiwanese customers; the price for 5nm (SF5) wafers increased by 10% to 15%, nearly 10% higher than the older 8nm process. The SF4 production line at the Pyeongtaek factory has been operating at full capacity since the end of last year, producing logic chips for customers like Qualcomm and providing basic bare chips for Samsung's own HBM. Analysts point out that after TSMC's advanced capacity was fully booked, customers turned to Samsung and Intel, giving Samsung room to raise prices.Samsung's foundry business has been continuously losing money since 2022, but the company expects to quickly turn a profit driven by improved utilization rates, yield improvements, and rising prices. Foundry revenue in the second half of the year is expected to grow by double digits year-on-year, with advanced processes accounting for more than half, and AI and high-performance computing applications accounting for over 30%. Companies like Tesla, Apple, Broadcom, and NVIDIA have already reached relevant cooperation agreements with Samsung, and Google is also in talks to use the SF4 process.

The Hormuz negotiations are at a standstill, and the tension in the Middle East continues to "heat up" oil prices

Supported by the uncertainty of the reopening prospects of the Strait of Hormuz and the ongoing tensions in the Middle East, both WTI and Brent crude oil prices continued to rise in the U.S. trading session. Iran reiterated several conditions before agreeing to fully reopen the strait. According to Al Jazeera, the conditions proposed by the Secretary of the Supreme National Security Council of Iran, Zolghadr, include: ending the U.S. maritime blockade and the withdrawal of the U.S. Navy and Air Force from around Iran.Tehran also demanded compensation for damages caused by recent conflicts, the lifting of sanctions, and the unconditional unfreezing of Iranian assets. These demands currently reduce the likelihood of a swift return to normal shipping and help maintain the risk premium in WTI prices. Meanwhile, negotiations with Oman to establish a secure shipping route through the Strait of Hormuz seem to be making progress.However, due to the failure to reach an agreement on full reopening, investors remain cautious about the risks of long-term disruptions to oil supply. Regional tensions are not limited to the Strait of Hormuz. The Iran-backed Houthi forces in Yemen claimed responsibility for a drone attack on Saudi Aramco's refinery in Saudi Arabia. The latest attacks on major energy infrastructure have heightened market concerns about the security of regional oil supplies.
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