Qualcomm (NASDAQ:QCOM) will go with Samsung Electronics as its partner to manufacture its next-generation Snapdragon 820 chipset, according to a Re/code report, potentially dealing another blow to silicon fabricator Taiwan Semiconductor Manufacturing Co.
The report, citing unnamed sources familiar with Qualcomm's roadmap and Samsung's foundry operations, said that because Samsung's foundries can make chips that use thinner 14-nanometer transistor technology, it is going to win the deal. TSMC is still producing 20-nanometer chipsets, which cost more and generally have weaker battery performance.
Qualcomm and Samsung declined to comment on the report, according to Reuters.
If confirmed, it would be another signal that Samsung is putting more emphasis on its in-house semiconductor operations as a way to diversify its revenue away from smartphones. The company hopes to bounce back after a disappointing 2014 in smartphone sales by leaning on its new flagship phones, the Galaxy S6 and S6 Edge. However, a chipset unit that is winning deals from major customers would limit Samsung's exposure to the vicissitudes of the smartphone market.
Samsung is also looking to win business back from Apple (NASDAQ: AAPL). According to a report earlier this month from Bloomberg and a Re/code report from February, Apple plans to have Samsung build its A9 processor for its next iPhone. Apple previously had used Samsung to manufacture its iPhone and iPad chips, but moved to TSMC for its current iPhone 6 and 6 Plus phones.
Qualcomm did not offer much detail on the Snapdragon 820 when it unveiled the high-end chipset in March, other than to say it will feature a custom Kryo 64-bit design, be built using the FinFET process, and that Qualcomm will begin sampling the chip in the second half of this year. The Snapdragon 820 will integrate an LTE modem as well as a custom-designed Qualcomm processor and graphics core in a single System-on-a-Chip (SoC), Re/code noted.
The Snapdragon 820 is designed for 2016 flagship phones. Qualcomm is clearly hoping it wins more favor with Samsung, which replaced the Snapdragon 810 with its own Exynos chipsets in many variants of its Galaxy S6 and S6 Edge.
For more:
- see this Re/code article
- see this Reuters article
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