Samsung has missed an opportunity to collaborate with Qualcomm on the mass production of its upcoming flagship chipset, the Snapdragon 8 Gen 4. Instead, TSMC (Taiwan Semiconductor Manufacturing Company) will manufacture the chipset using its 3nm ‘N3E’ technology in the coming year. This decision by Qualcomm is anticipated to extend to other companies, including MediaTek, leveraging TSMC’s advanced manufacturing process.
Dual-Sourcing: Qualcomm’s Strategy to Lower Snapdragon 8 Gen 4 Production Cost
Qualcomm has decided to team up with Taiwan Semiconductor Manufacturing Company (TSMC) for the mass production of its next gen chipset, instead of partnering with Samsung. TSMC will employ its 3nm ‘N3E’ technology for this collaboration in 2024. Samsung’s cautious approach to adopting the 3nm process reportedly cost the company the chipset orders. Originally, Qualcomm planned to use a dual-sourcing strategy. That was to involve both Samsung and TSMC for 3nm technology. This was a move to reduce production costs. However, this strategy didn’t materialize, leaving Qualcomm with only TSMC as its supplier.
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One potential reason for choosing TSMC over Samsung could be the superior technology offered by TSMC. Samsung’s 3nm technology may not be as advanced as TSMC’s, and Qualcomm has faced criticism in the past for not utilizing TSMC’s foundry for the Snapdragon 8 Gen 1. TSMC’s 3nm process, particularly the N3E variant, is expected to bring improvements in yields and wafer prices. These factors likely made Qualcomm’s decision financially viable.
Samsung’s 3nm technology also faced challenges with lower yields, possibly impacting its competitiveness in securing orders. Earlier reports suggested that Samsung’s foundry would need to increase yields to 70 percent to secure orders. Additionally, the Snapdragon 8 Gen 4 marks Qualcomm’s transition to using its custom Oryon cores instead of ARM’s CPU designs, starting in 2024. This shift, along with manufacturing on TSMC’s N3E process, might increase the cost of the Snapdragon 8 Gen 4 compared to its predecessor, the Snapdragon 8 Gen 3.
Snapdragon 8 Gen 4 May Affect Smartphone Pricing
While TSMC’s technology offers advantages, the decision may have repercussions for flagship smartphones using the upcoming chipset. Manufacturers might need to make compromises in certain aspects to balance the increased production costs. This move will be important to ensure profitability in the competitive smartphone market. Overall, Qualcomm’s choice of TSMC as the sole supplier for the Snapdragon 8 Gen 4 underscores the importance of advanced semiconductor technology and its impact on the broader mobile industry.