Qualcomm has always manufactured its leading-edge chips at contract chip maker TSMC. But now Samsung has had an edge over TSMC and other chip plants because using thinner 14-nanometer wiring. TSMC can only manage 20-nanometer transistors.
It is also especially galling as Qualcomm saw its high-end chip, the Snapdragon 810, shut out of Samsung’s new Galaxy S6 because Samsung’s homegrown Exynos chip was shedloads better, thanks mostly to the 14nm process.
As a result, Qualcomm had to cut its financial outlook for the year even as the 810 won a spot in other flagship products, such as the latest HTC One and LG Flex 2.
The Snapdragon 820 is the next generation of Qualcomm’s top-end chip family, designed for the 2016 flagship models from the leading phone makers.
Strangely Qualcomm is hoping that the move to use Samsung’s factories will help it win back business for the next Galaxy S flagship.
Apple also plans to make its high-end chip, the A9, at Samsung’s plants which means that most high-end smartphones will be made by Samsung.
The deals with Qualcomm and Apple mean more revenue and profit for Samsung’s chip-making arm. In theory, though, Samsung appears to be taking away an advantage from its own phones — given that currently only its Exynos processor is using the 14-nanometer process.
Taiwan’s TSMC might be used as a secondary source to ensure capacity,so it might not lose out that badly.
Qualcomm said in January that the Snapdragon 820 would reach the sampling stage later this year and use a more advanced manufacturing process, but it did not elaborate at the time. Qualcomm also plans to move back to its own processing core rather than using an outside design as it did with the 810, doing so as part of an effort to rapidly get a 64-bit core into the market.