In significant news for the mobile device industry, Qualcomm is planning on making its next generation of mobile device chips in Samsung’s chip-making plants, marking a break from its current practice of using Taiwan Semiconductor Manufacturing Co and other foundries.
Samsung has the edge over TSMC and other chip manufacturers because it is producing chips using thinner 14-nanometer wiring, compared with the current range of 20-nanometer transistors being made at TSMC. Everything else being equal (which isn’t strictly the case), thinner wires translates to smaller and cheaper chips, and better battery performance.
Qualcomm’s latest high-end chip, the Snapdragon 810, and those before it have historically featured in a wide range of mid and high-end smartphones and devices, but with Samsung’s Galaxy S6 eschewing the Snapdragon for its own, in-house Exynos processor, Qualcomm has already had to cut its financial outlook for the year, despite the 810 featuring in other flagships including HTC’s One M9 and LG’s Flex 2.
The Snapdragon 820 is already in Qualcomm’s sights, designed for next year’s flagship models from leading manufacturers. It’s undoubted that Qualcomm is hedging its bets here, manufacturing the Snapdragon 820 on Samsung’s factories has to be a move to get the Snapdragon back in to Samsung phones next year. One wonders whether Samsung will find the merits in the Snapdragon range next time around, instead of continuing to invest in (and use) its Exynos chips which are already starting to prove themselves.
Qualcomm isn’t the only one moving to Samsung’s factories; even Apple plans to make its next high-end chip, the Apple A9, using Samsung’s processes. Samsung has clearly developed a winning formula in its factories with other manufacturers looking to take advantage, and the deals with Apple and Qualcomm are likely to do good things for Samsung’s bottom line.
Whether the Exynos chipset remains competitive, once Apple and Qualcomm are able to emulate the 14-nanometer advantage it currently holds, is a big unknown, but the answer may not really matter — if everyone comes up to the same standard, it may well be cheaper (and more efficient) for Samsung to look at moving back to Qualcomm chips next year, instead focusing its own efforts elsewhere. There is also the extra cost that Samsung has to factor in when using Exynos; while Qualcomm processors have build-in LTE capability, Exynos processors do not, requiring an additional chip which does add a little bit of cost.
It’s an interesting insight into a part of the industry that many of us don’t pay too much attention to; if you look at where Qualcomm chips are, it’s often easier to work out where they aren’t, as they’ve become so ubiquitous, and almost synonymous with Android of late. Samsung’s Exynos chips are interesting, and they’re not just in the S6 and S6 Edge; they’ve featured in other platforms including Chrome Devices as well, and they’re quite powerful.
On the other hand, perhaps a good number of us don’t much care where the processor inside our favourite phone or tablet comes from, as long as its fast, efficient, and powerful.
looks like 2015 Year of Samsung, wish they would reduce the prices for S6 edge 🙂