Should Taiwan's Top Three Substrate Suppliers Be Worried? Samsung and SK Hynix Jointly Demand Price Cuts, Experts Say No Need to Panic: Taiwanese Firms Have Strong Negotiating Power

AI-driven demand has caused memory prices to surge, pushing Samsung and SK Hynix profits to new highs. However, these two South Korean memory giants have recently demanded price cuts from substrate suppliers during new contract negotiations, raising market concerns about potential impacts on Taiwan's 'Big Three' substrate manufacturers: Unimicron, Nanya PCB, and Kinsus.

In response, Liao Wan-ting, General Manager of United Securities Investment Consulting, recently analyzed the situation on the program 'Taiwan's Great Era,' stating that Taiwanese substrate makers possess stronger pricing power compared to their Korean counterparts, thus limiting the impact of such demands.

Liao pointed out that South Korean substrate manufacturers do not even rank within the global top 10, making them insignificant players in the industry. When memory giants hold strong negotiation leverage, Korean substrate firms have no choice but to comply. In contrast, Taiwanese substrate manufacturers enjoy higher pricing power due to more diversified customer bases and product portfolios.

She explained that while Korean substrate suppliers may serve only memory companies, Taiwanese firms like Unimicron (3037) have a broad range of clients, including GPU and CPU manufacturers. Similarly, Nanya PCB (8046) benefits from diversified products and customers, giving them greater room for price negotiation.

Therefore, Taiwanese substrate makers hold stronger bargaining power than Korean firms. Meanwhile, South Korean substrate suppliers, being narrowly focused on domestic memory companies with limited product variety, are more vulnerable to client control.

More exclusive insights from Feng Media: ・ South Korean 'retail investors' who borrowed to invest in stocks face massive margin calls as market crashes—400 billion KRW wiped out ・ 'Worst memory shortage ever' to hit next year? SK Hynix CEO warns: Supply-demand imbalance will remain unresolved beyond 2030 ・ Samsung reports strong earnings, yet stock plunges—foreign media highlight 'this figure' falling short, disappointing investors