The move is rather important. Qualcomm needs its Snapdragon 820 to do really well to make up for the 810 which had a reputation for getting hotter than Santánico Pandemonium doing a serpent dance over a live volcano and not in a good way.
However the 820 has been getting good reviews and seems to be a return to form from Qualcomm.
The deal is great for Samsung. Not only will it get to stick it to TSMC, the company had suffered because it leaned rather hard on Apple, which promptly cancelled orders when its iPhone 6S tanked.
Qualcomm has never used anyone other than TSMC to make high-end chipsets, and Samsung could gain more than $1 billion in revenue from the Snapdragon 820 orders.
TSMC counted Qualcomm as its top customer and said it expected falling demand in high-end smartphones in the current quarter after posting a better than expected quarterly profit.
Qualcomm’s order will not sort out Samsung’s earnings, the deal suggests gathering momentum in the Korean firm’s efforts to grow its foundry business to diversify its revenue stream.
The firm is relying more on components such as chips and displays
What appears to have won Qualcomm over was Samsung’s 14-nanometre technology and it is likely that Qualcomm would likely increase orders to Samsung for other Snapdragon chips that would launch later this year.
It is likely to be a key client once the South Korean firm started mass production based on the 10-nanometre technology under development. Qualcomm’s orders could also attract more customers away from TSMC to Samsung.