Samsung is one of the manufacturers of chipsets. Samsung Foundry has clinched a deal to manufacture Qualcomm processors.
According to a report, the company won the deal to produce Snapdragon 875 chipsets. It seems that Samsung may have offered a better deal to Qualcomm than TSMC. Samsung will manufacture the whole batch of chipsets for next year’s flagship phones.
From what we know, the deal is worth around 1 trillion Korean Won, which translates to $844 million. This is the first time that Samsung Semiconductor got a deal this big. The company will be producing chipsets to power flagship devices for almost a whole year.
This is not the first time for Samsung to produce a Snapdragon flagship chipset. Previously, it had manufactured 2016’s Snapdragon 820. However, this new deal is a big win for Samsung. Reports say that the contract to manufacture the new Qualcomm silicon is worth $1 billion. The production of the Snapdragon 875 chipset is already underway. The new chipset is a 5nm design and will be smaller than the current Snapdragon 865 series.
The Taiwan Semiconductor Manufacturing Company (TSMC) lost this Qualcomm deal with Samsung. According to a few insiders, Samsung’s low prices helped it win the contract. It provided a lower price with a promise of quality standards equivalent to TSMC. This offer from Samsung seems viable too. The company itself produces its own Exynos chipsets in large quantities. It has stronger leverage to produce many chips of the same quality at a cheaper cost. Without Samsung’s proposition, the cost of flagships was bound to rise higher. But now, with Samsung winning the deal, this seems like a full circle. Smartphone makers and customers will both benefit from the deal.
Technologically, TSMC has a stronger foothold. But Samsung’s offer of quality products at a lower cost has been perceived well. This also paves Samsung as a chip-maker in the US market. This deal is the third one for Samsung’s US order this year. And with tightening restrictions of the US administration over Chinese companies, Samsung is on the good side. This new Qualcomm deal also proves to be beneficial for Samsung on that end.
Samsung is also very invested in research and development. Since March, the company has invested a lot in money in R&D of manufacturing chips. Samsung plans to become the number one semiconductor firm by 2030. Seeing its investment in cutting edge technologies to make quality chips, we can say that it is headed on the right path.
So far, two versions of the flagship chipset are confirmed – Qualcomm Snapdragon 875 and 875G. It is not sure if Samsung will produce both the chipsets. Phones from Samsung Galaxy S30 series, Xiaomi, and Oppo are set to feature the chipset. As we move forward with this year, we will probably see a few leaks of the new Snapdragon 875 chip specs.
We are excited to see Samsung take over the manufacturing and mass production of the 875 chipsets. Also, as this hints at a price drop for premium Android smartphones, we are even more delighted.