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Hardware

Samsung Is Reportedly Planning To Raise Chip Prices By 20% (pcmag.com) 28

Posted by BeauHD from the you-know-what-that-means dept.
Samsung is currently considering raising the cost of its semiconductor products by up to 20%, as well as those it manufactures for other companies, which would ultimately lead to consumers paying more for new devices. PC Magazine reports: As Bloomberg reports, the price hike consideration is in response to just about everything in the world getting more expensive, including the cost of raw materials and the logistics surrounding production pipelines. The final price increase is expected to be linked to sophistication of the components being manufactured, but that still means vendors will end up paying between 15-20% more for chips. Samsung is a huge player in the semiconductor industry, producing processors for a wide-range of industries, as well as memory products, storage solutions, and foundry solutions which allow other semiconductor products to be manufactured. Adding up to a 20% price rise across all those sectors will inevitably push up prices for any products that use Samsung components.
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Samsung Is Reportedly Planning To Raise Chip Prices By 20% More

Samsung Is Reportedly Planning To Raise Chip Prices By 20%

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  • Apple demands at least 5-year price and availability guarantees.

    • Complex contracts like that may have considerations that might peg prices to inflation and/or costs of some important raw material. Also, transportation may be handled external to the acquisition, so Apple can be flexible with where the chips go. They have expanded production beyond China. For example into India, to many even around excessive import tariffs.

      • True. Also, many companies know that circumstances can quickly change and either charge extra for the multi-year price lock, or as you said have exemptions for specific types of circumstances.

        For example, if I were currently selling a widget for $1 and Apple said they would buy 10,000 a year, with a price lock for the next 5 years, I would examine all the things that could change during the next 5 years and add a buffer for inflation and unforeseen supply changes. There is probably a reason Apple wanted t

      • Complex contracts like that may have considerations that might peg prices to inflation and/or costs of some important raw material. Also, transportation may be handled external to the acquisition, so Apple can be flexible with where the chips go. They have expanded production beyond China. For example into India, to many even around excessive import tariffs.

        Good points, and you're absolutely right.

        Yeah, it's obvious that Apple likes to hedge its bets with Suppliers and Contract Manufacturers.

    • Re: (Score:2)

      by Anonymous Coward
      Loads of companies do that. HOWEVER, the reality is in times like this with unprecedented rises in costs companies like Apple need to decide if it is more expensive to renegotiate the contract to help the manufacturer or be bastards and watch them go broke knowing that the other chip manufacturers will be fully aware of this behaviour and will all build large risk reserves into any pricing for Apple meaning that Apple just fucked themselves.

      • Loads of companies do that. HOWEVER, the reality is in times like this with unprecedented rises in costs companies like Apple need to decide if it is more expensive to renegotiate the contract to help the manufacturer or be bastards and watch them go broke knowing that the other chip manufacturers will be fully aware of this behaviour and will all build large risk reserves into any pricing for Apple meaning that Apple just fucked themselves.

        True enough.

  • Consumers tend to buy assembled devices...

  • It's profiteering. This is what happens when you don't have a healthy and functioning capitalist economy and instead have a handful of trusts. But we've cut the government too much to solve failures in the free market. Which of course is why the government was cut in the first place after decades of lobbying by the company's currently profiteering off of us.

  • Keep your gadgets... (Score:3)

    by rantrantrant ( 4753443 ) on Saturday May 14, 2022 @03:30AM (#62532280)
    ...for at least 20% longer. Issue resolved.

    • Love to, but it will cost me 50-100% more to do that since there's no battery hatch, and I don't buy phones to show people how much money I can waste, so battery replacement is a big percentage of the phone's value.

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