Thanks to poor returns, Samsung reportedly lost its Snapdragon manufacturing business to TSMC

Thanks to poor returns, Samsung reportedly lost its Snapdragon manufacturing business to TSMC

Qualcomm has often switched between the world’s two largest independent foundries, TSMC and Samsung, to build its flagship Snapdragon chips. The Snapdragon 845 SoC was built by Samsung using its 10nm process node. The Snapdragon 855 and 865 mobile platforms were manufactured by TSMC using its 7nm and advanced 7nm process nodes respectively.

Qualcomm upset with Samsung Foundry’s low return rate

Last year, Qualcomm handed over production of the Snapdragon 888 to Samsung and its 5nm process node, and the Snapdragon 8 Gen 1 is also built by Samsung Foundry using its 4nm process node. But Samsung has a major problem as its return rate for the chip is said to be a disappointing 35%. This means that for every 100 Snapdragon 8 Gen 1 chips manufactured, only 35% are good enough to ship to manufacturers.

That’s a middling number and has led Qualcomm to start talks with TSMC about returning its foundry business. TSMC’s rate of return for its 4nm process node is said to be 70%, twice that of Samsung. With much higher efficiency, one would assume that TSMC’s assembly line prowess exceeds Sammy’s and could result in more powerful and more energy-efficient units from TSMC.

Production of the 3nm Snapdragon 8 Gen 2 will be the responsibility of TSMC

According to The electSamsung has decided to switch back to TSMC for the next version of its flagship application processor (AP) which is expected to be called Snapdragon 8 Gen 2. The 3nm chipset will start appearing in consumer products next year.

It turns out that Qualcomm isn’t the only company to leave Samsung for TSMC. A 7nm graphics chip that Nvidia originally asked Samsung to manufacture has now seen production shifted to TSMC. With big companies like Qualcomm and Nvidia leaving Samsung for TSMC, Samsung Foundry faces a major problem.

Elec’s report says that Qualcomm wants to launch the “Plus” version of the Snapdragon 8 Gen 1 earlier than usual this year and that production of this 4nm chip has been contracted to TSMC. This component could be ready to ship during the second quarter.
The report from The Elec also seems to indicate that Qualcomm has outsourced the production of Snapdragon 8 Gen 1 chips to TSMC, which we told you last December could happen due to Samsung’s abysmal rate of return. In this article, we wrote, “Some industry experts agree that TSMC’s chip manufacturing process is superior to Samsung’s in size and power efficiency.”
We added that “if Qualcomm decides to split production of the Snapdragon 8 Gen 1, some devices may have performance and/or power efficiency differences with other devices, even if they both use the same chipset. “. Qualcomm plans to continue using Samsung Foundry to build radio frequency (RF) chips using the 7nm process node.

After Samsung met with Qualcomm in the United States last year, a Qualcomm executive reportedly said that even if he wanted to, Qualcomm could not give Samsung more business because of the yield issue. And it turns out that the Exynos 2200 AP performed worse than the Snapdragon 8 Gen 1, which would seem to indicate that the problem lies somewhere inside Samsung Foundry.

More bad news for Samsung came from another report in The elect who said Samsung is falling behind TSMC in the race to amass a sizable library of IP for 3nm GAA (Gate All Around).

The report said that Samsung’s lack of intellectual property in this sector is due to Samsung Foundry’s lack of customers. TSMC has 35,000 to 37,000 IP addresses for 3nm GAA compared to a range of 7,000 to 10,000 for Samsung Foundry.

GAA is a new transistor structure that replaces FinFET. It uses gates that touch all four sides of an ultra-thin channel and should remain in use as we move from 4nm process nodes down to 2nm and maybe even lower.