Samsung lost a lucrative contract to produce Qualcomm’s Snapdragon chip to TSMC

Qualcomm often switches back and forth between the world’s two top semiconductor manufacturers, Samsung and TSMC, to be responsible for producing its highest-end Snapdragon processors. Snapdragon 845 used to be manufactured by Samsung on 10nm process, while Snapdragon 855 and 865 were manufactured by TSMC on 7nm process.

Since last year, Qualcomm has signed a contract with Samsung to produce Snapdragon 888 chip on 5nm process, and the latest Snapdragon 8 Gen 1 chip on 4nm process. However, the Snapdragon 8 Gen 1 chip production line has encountered problems, when out of 100 chips shipped, only 35% is of sufficient quality to supply Qualcomm.

This is a disappointing rate, causing Qualcomm to decide to cooperate again with TSMC, to produce the next Snapdragon chips. TSMC’s quality rate on the 4nm process is up to 70%, twice as high as Samsung’s.

According to a report by Elec, the production line of the Snapdragon 8 Gen 2 processor chip based on the 3nm process will be handled by TSMC, promising to launch in the market next year.

Qualcomm isn’t the only company leaving Samsung, either. A production line for 7nm graphics chips, which Nvidia required Samsung to produce, has also been transferred to TSMC.

According to Elec, Qualcomm plans to launch an upgraded version of Snapdragon 8 Gen 1 Plus earlier this year. And this 4nm chip production line has also been handed over to TSMC.

The report also said that Samsung is running out of breath before TSMC in the race to produce chips on the 3nm process. TSMC currently has 35,000 to 37,000 orders, while Samsung has only 7,000 to 10,000 orders for 3nm chip units. Apparently, Samsung Foundry is having a huge problem.

Reference: phonearena