wccftech.com, Jan. 03, 2025 –
Samsung lost a huge chunk of its business to TSMC due to its poor management and yield ratio, but it appears that the company could bounce back. The Galaxy-branded smartphone maker is now expected to gain TSMC's 2nm chip business, as Qualcomm reportedly has its eyes on Samsung Foundry for all its production needs. It was recently reported that the high production cost and poor production capacity have scared Apple into adopting 3nm chips this year for the iPhone 17 Pro. It can be observed that the issue is widespread and has affected Qualcomm's operational plans as well.
Qualcomm plans to move away from TSMC and shift to Samsung for its 2nm chip business due to higher costs and limited production capacity
TSMC is potentially increasing the price for its advanced chips by 5 to 10 percent this year, which could end up increasing the price of the handsets. With rising costs, clients are now planning to switch to Samsung for its 2nm business, but it remains to be seen how the South Korean giant will handle its lower yields (via TrendForce). Qualcomm potentially wants its future 2nm chips to be cheap, which will also benefit Samsung to retain its lost position in the market.
Qualcomm could also have shifted to Samsung Foundry because Apple, TSMC's biggest client, has reserved 2nm chip production at its facility. This gives Apple an upper hand compared to the rest of the industry, but we recently covered that the Cupertino giant would have to wait to use TSMC's offerings. To tackle this, the iPhone 17 Pro models will stick to the supplier's 3nm node but will utilize its new N3P process.
While Qualcomm is moving away, TSMC plans to increase its production capacity significantly in 2026. The supplier had a market share of 64.9 percent in the global semiconductor foundry as of 2024, and we suspect the numbers will go below the mark unless it decides to fix technical issues involving higher costs and limited production capacity. The supplier is slated to increase its 2nm capacity from 10,000 to 80,000 wafers during the trial production per month in 2026.
Apple will potentially use TSMC's 2nm chips for 2026 iPhone 18 Pro models based on the N3P process for better performance and power efficiency. In contrast, Qualcomm will stick with Samsung in manufacturing the Snapdragon 8 Elite series of chips in the future, and while exact details are scarce, we believe the South Korean supplier will improve its yields and costs significantly. This will also allow Qualcomm to have a dedicated supplier for 2nm chips other than TSMC, which will create healthy competition and keep costs at bay.