Sources are indicating the Qualcomm and Samsung have reached a deal for the next generation of Snapdragon processors, the Snapdragon 820, to be produced at Samsung’s foundries. In the past, Qualcomm has primarily used Taiwan Semiconductor Manufacturing Co. and other smaller chip plants to produce their processors. However, Samsung’s move to develop and deploy a 14-nanometer production process, compared to everyone else’s 20-nanometer production, appears to have been enough to convince Qualcomm to make the move. With a smaller process in place, Samsung’s plant can produce chips that are cheaper, smaller and use less energy.
Some have noted that this move may be a reaction to Samsung’s decision to use their own Exynos processors in the Samsung Galaxy S6. Despite having their current generation flagship processor, the Snapdragon 810, being used in the top-tier devices from other manufacturers, Qualcomm likely wants to win back business from Samsung in next year’s flagship phones. Samsung is such a dominant player in the market right now, that the loss of the Galaxy S6 caused Qualcomm to have to revise their financial projections for the current year.
At the same time that Qualcomm plans to move to Samsung’s foundries, Apple is planning to be present also, selecting Samsung for production of their high-end chip, the A9. Industry analyst Patrick Moorhead describes the situation as “a great example of ‘co-opetition.’”
In the meantime, TSMC is hoping Samsung may reach out to them to act as a secondary source for some of their chip production to make up for the loss of the Qualcomm business.
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