Samsung is reportedly in late-stage talks with Qualcomm to manufacture its premium Snapdragon chipsets using Samsung's next-generation 2nm process. If realized, this partnership would mark a significant pivot for both companies, though it could also pose challenges for Samsung's Exynos business.
The move comes as Qualcomm seeks to diversify its production beyond TSMC, aiming to control costs while maintaining its premium market position. The Snapdragon 8 Elite Gen 5, currently priced at around $280 per unit, is expected to see further cost increases with the upcoming Gen 6 Pro model, which could exceed $300. Samsung's 2nm GAA process, though still at a 50% yield rate, offers an attractive alternative if it can reach the 70% threshold required for mass production.
Samsung has already demonstrated its capability in advanced manufacturing with a $16.5 billion order from Tesla and cryptocurrency mining firms using this process. However, improving yield remains a critical hurdle. If successful, Samsung could secure a steady stream of high-value orders from Qualcomm, potentially worth hundreds of millions annually.
Yet, the partnership may not be without consequences for Samsung's Exynos division. The cost of Snapdragon chipsets is significantly higher than Exynos alternatives, which could strain Samsung's smartphone business margins. Additionally, Qualcomm has a history of imposing strict conditions on partners, such as requiring exclusive use of its flagship chips in premium devices like the Galaxy S26 Ultra, with penalties for non-compliance.
For Qualcomm, this shift would reduce dependency on TSMC and enhance supply chain resilience, while Samsung could strengthen its foundry business. However, balancing these strategic benefits against potential financial risks will be crucial. The outcome of these negotiations will likely set a precedent for semiconductor partnerships in the industry.
