Samsung Electronics has decided to use the Snapdragon 865 application processor (AP) from Qualcomm instead of its own Exynos AP for the Galaxy S20 smartphones to be sold in Korea.
This is the first time that the Exynos AP is excluded from Samsung's flagship smartphones sold in the Korean market. The Galaxy S20 will be released to global markets from March 6.
The Korean smartphone giant has also decided to use 5G modems from Qualcomm. This means the company has suffered a setback in attaining its vision of becoming No. 1 in the system semiconductor sector by 2030.
So far, Samsung has used its Exynos AP for its flagship smartphones sold in Korea and Europe, and the Qualcomm Snapdragon AP for products sold in North America and China. In particular, the Samsung Exynos AP had been used in all flagship smartphones released in Korea until last year. The Exynos AP will go into the Galaxy S20 smartphones to be released in Europe.
Accordingly, speculations are rife about why Samsung’s decision to stop using the Exynos AP in its smartphones for the Korean market. Industry experts say that the reason may be the company’s failure to narrow the gap between the Exynos AP and the Snapdragon AP in terms of price and performance.
“Samsung’s IT and Mobile (IM) Business Division, which is in charge of the smartphone business, is separate from the Device Solutions (DS) division in charge of the semiconductor business. Each division makes a decision on its own,” said an industry watcher. “Nonetheless, it is quite unusual for Samsung not to use its own AP in flagship smartphones for the domestic market. I think that the reason is that the IM Business Division judged that the Exynos AP doesn’t stack up against the Snapdragon AP in terms of prices and performance."
It is a setback for Samsung Electronics' efforts to overtake Qualcomm, the global leader in the mobile AP market. Samsung has sought to expand the market share of the Exynos AP. According to Strategic Analytics (SA), Qualcomm ranked first with a 39.6 percent market share in the second quarter of 2019, followed by Apple (19.9 percent), Samsung Electronics (13.1 percent), and Huawei subsidiary HiSilicon (12.9 percent).
Mobile APs represent a core item of Samsung’s system semiconductor business along with image sensors and contract chip manufacturing.