One of the world’s tech giants is teaming up with a chip-making rival on an initiative to make next-generation mobile processors. Confirming weeks of speculation, Samsung said today that it has entered a deal with chip maker Qualcomm to use its second-gen 14nm FinFET process technology to mass-produce Qualcomm's Snapdragon 820.
The Snapdragon suite is a line of system-on-chip semiconductor products made primarily for mobile devices. The chip’s last major iteration, the 810, contained the fastest processor in the Snapdragon line when it was released in 2014. Samsung had been rumored to be the fabricator for the 820 for several months, and Qualcomm actually confirmed that fact in November.
Even though it was the main chip made by Qualcomm last year, the Snapdragon 810 suffered from thermal issues that led to reports of overheating and aggressive chip throttling that reduced performance. In fact, Samsung didn’t even rely on the Snapdragon 810 for its mobile devices last year, instead using its own Exynos processor in the Galaxy Note 5 and Galaxy S6 line of handsets.
The Qualcomm Snapdragon 820 processors (pictured) are expected to be in devices in the first half of 2016. Using 3D FinFET structure on transistors enables better performance and low power consumption, according to Samsung. The company called FinFET an optimized solution for mobile and IoT (Internet of Things) applications that could be applied to high-performance and power-efficient applications ranging from network to automotive.
The 14nm LPP (low-power plus) process delivers up to 15 percent higher speed and 15 percent less power consumption over the previous 14nm LPE (low-power early) process, thanks to improvements in transistor structure and the manufacturing process, said Samsung, which plans to use the same process for its own Exynos 8 chips later this year.
Samsung’s revenue from mobile devices has slowed in recent months. The company presumably expects that gearing up its chip fabrication business might pick up some of the slack. By making Samsung the sole manufacturer of the Snapdragon 820, the Qualcomm deal could bring more than $1 billion in revenue to Samsung, according to analysts quoted in a Reuters report.
But does all that make the alliance between Samsung and Qualcomm a major event? Linley Gwennap, principal analyst for The Linley Group, said not really.
"This is not a huge deal," Gwennap told us. He added that the arrangement applies only to the Snapdragon 820 -- Qualcomm will continue to use Tawian Semiconductor Manufacturing Company (TSMC) and other foundries for its lower-cost processors.
Still, "it is significant that Samsung is gaining foundry customers, offering real competition to TSMC at the leading edge for the first time in nearly a decade," Gwennap said. "As the sole supplier of leading-edge foundry technology, TSMC has charged high prices for its services, but the new competition from Samsung should moderate pricing and accelerate innovation."
Samsung has previously signed chip fabrication deals with Apple, supplying processors used in iPhones and iPads.
Image credit: Product shot by Qualcomm.