Samsung Electronics is trying to expand its presence in the global mobile application processor (AP) and foundry markets at the same time. The road ahead is bumpy though. This is because Samsung Electronics’ AP R&D is facing challenges and its foundry business unit is failing to catch up with TSMC. Besides, Apple and Huawei as smartphone manufacturers having their own APs are refraining from using Samsung Electronics’ foundry products to keep it in check.
Qualcomm is planning to produce its flagship processor Snapdragon 865 via TSMC and less expensive Snapdragon 765 and 765G via Samsung Electronics although Samsung Electronics’ foundry process roadmap is months ahead of TSMC’s. At present, the technological strengths of the South Korean and Taiwanese companies are showing little difference. TSMC introduced 7-nm process technology ahead of Samsung Electronics whereas the latter introduced extreme ultraviolet (EUV) lithography process technology for the first time in the industry.
The decision of Qualcomm, the global AP market leader, is to keep Samsung Electronics at bay by not sharing its intellectual properties related to flagship APs. For mass production, fabless and foundry companies need to collaborate at least for months and, as a matter of course, the former needs to provide the latter with its chip design drawings and the like. Samsung Electronics, which owns the world’s third-largest mobile AP brand Exynos, is something that needs to be kept in check for Qualcomm. Apple is already producing its APs via TSMC and TSMC is producing APs designed by HiSilicon, Huawei’s fabless firm.
In the meantime, market research firm TrendForce recently said that Samsung Electronics’ global foundry market share fell 1.3 percentage points in three quarters to 17.8 percent in the fourth quarter of this year while that of TSMC rose 4.6 percentage points to 52.7 percent.
Last month, Samsung Electronics stopped its Mongoose Project for mobile CPU core development, saying it would focus on graphics processing units (GPUs) and neural processing units. It has been said for years that the Exynos processor, which dominated the global AP market in the past, is inferior to Snapdragon in terms of CPU performance. In addition, Samsung Electronics is currently using ARM’s Mali GPU while Qualcomm’s Adreno GPU for use in APs is higher in performance than Mail. Although Samsung Electronics said in June this year that it would develop GPUs in cooperation with AMD, actual production is likely to take at least one year.