Here’s a surprise headline that caught my eye last night: Qualcomm is moving away from TSMC as the sole manufacturer of its new Snapdragon 820 processor, which will power the next-generation of flagship Android smartphones. So who got the gig?
Samsung, according to Reuters, which valued the contract at about $1 billion. It’s particularly surprising because Qualcomm is ultimately giving business to a competitor – but that might be part of the strategy. Samsung will launch its new Exynos processor in the Galaxy S7, which will also pack Samsung’s Qualcomm Snapdragon 820 processor in some territories. What better company to rely on to build the chips than one who also needs to make sure it has enough production yield to ship its own flagship smartphones?
Reuters notes that this deal is also one-of-a-kind because Qualcomm has previously only used TSMC, which “has counted Qualcomm as its top customer.” It’s a big loss, no doubt, and it appears Samsung ultimately won the order because of its 14-nanometre manufacturing process.