Apple, Companies, VR World

Qualcomm to Use Samsung’s Fabs For Next Flagship Chip

Qualcomm (NASDAQ: QCOM) will be turning to its competitor Samsung (KRX: 005930) to use its fabs to build its next-generation flagship SoC, according to a report by Re/Code.

The publication says that the Snapdragon 820 will be manufactured at Samsung’s chip-making plants due to their ability to produce silicon at 14 nm as opposed to the 20nm that TSMC (TPE: 2330) produces its chips at. Producing it at a smaller process node means better battery life.

While Qualcomm had a handful of high-profile wins with the Snapdragon 810, it missed out on the Galaxy S6. Instead Samsung decided to use its home-grown Exynos chip instead. This major loss meant that Qualcomm was forced to cut its financial outlook for the year.

Cooperating with the competitor

Cooperation between two companies that compete in some sectors is not uncommon within the smartphone space. Remember: Samsung and Apple (NASDAQ: APPL) work closely on the iPhone and iPad, with Samsung being the source of everything from the SoC to the display, yet still compete fiercely.

Samsung’s fab facilities present a fierce competitor to TSMC, but it’s advantage might not last that long. TSMC is pushing past 14nm and moving to 10nm which should tip the balance of power back in its favor.

However until then TSMC has a lot to do in order to win back these high profile clients. It’s not confirmed that Samsung has won these deals, but it’s very likely. TSMC posted a solid financial year with the business that it won from Apple’s iPhone 6. To continue these gains, TSMC will have to prove to vendors that it’s the better option than Samsung for the 2017 flagship phones.

  • gadget_hero

    I wish AMD would have Samsung do the fabbing for them!

    • christianh

      They basically do since GF got it’s process from them and can get help from them with yields, etc…

      • gadget_hero

        GF seems to have many yield problems even though they are using Samsung FAB tech, I wish we had Samsung’s yields!

        • christianh

          Wow, can you show me a link to that…? SamsungGFIBM have been working closely together for years… Part of the collaboration is to give Samsung’s process more customers through second-sourcing…

          DOOM AND GLOOM…

          • Theo Valich

            Not exactly doom and gloom. Samsung, GlobalFoundries and IBM are all a part of Common Platform, their alliance where all three use joint development methods to make new manufacturing process. In theory, there should be no difference between the results coming from all three Fabs. The difference is the processes they all decide on implementing, such as ‘LP/ULP’ or ‘HP/UHP’. Low Power is oriented towards mobile, High Performance is geared towards CPU and GPUs. Nowadays, we’re seeing that all foundries are moving towards manufacturing everything in LP/ULP, which is more expensive than the standardized HP/UHP.

            Good thing for the industry is that all the delays at Intel caused CP to catch up, and now we have 14nm parts from both sides. One of key differentiators for TSMC / Intel vs. CP was the fact that CP was using Gate First, while TSMC/Intel used Gate-Last approach. With 20nm onwards, CP moved to Gate Last and the results are pretty much speaking for themselves. Samsung managed to launch a phone using it’s own chips using the most advanced process technology and fulfill the orders.

  • christianh

    If only Intel heard of cooperation…