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Samsung Places Large Order with Rival Qualcomm
Sleeping with the Enemy
Samsung Places Large Order with Rival Qualcomm
  • By matthew
  • May 5, 2014, 02:57
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Qualcomm’s Snapdragon system-on-chip application processor is designed to be used in smartphones, tablets, and smartbook devices.
Qualcomm’s Snapdragon system-on-chip application processor is designed to be used in smartphones, tablets, and smartbook devices.

 

Samsung Electronics is seeking to court Qualcomm, a global giant in system semiconductors. The tech giant has judged that, to beat the crisis in th system semiconductor business, it inevitably needs to secure orders from Qualcomm, which is a rival and at the same time its largest potential client.

Qualcomm is a number one company in mobile application processor (AP) production as it captured a 53.6 percent market share (in sales) in mobile APs, which are used for smartphones and notebook computers.

Qualcomm is a fabless company, which means the company does not have its own production facilities and instead only designs and develops semiconductors. Its actual production is assigned to external foundries.

In this regard, Qualcomm is Samsung Electronics’ rival in terms of mobile AP development, but at the same time a client from whom it needs to secure large amounts of foundry production.

In particular, the number one handset company recently has been struggling in the foundry market, as it was defeated by Taiwan Semiconductor Manufacturing Company Limited (TSMC), the world’s largest foundry.

According to market research agency Gartner, Samsung Electronics’ market share in the foundry market last year halved at 5.7 percent compared to two years before. In the meantime, TSMC solidified its number one spot with 46.3 percent last year by taking most of Qualcomm’s orders.

In a bid to beat the crisis, the tech giant secured Qualcomm’s foundry orders.

In this light, the company is constructing “line 17” solely for system semiconductor production within its Hwaseong production facilities, to be operated in the second half of the year.

The site is scheduled to produce mobile AP chips using state of the art processing method “14 Nano FinFET” technology developed by Samsung Electronics.

14 Nano FinFET is a technology that can shrink the chip size up to 15 percent compared to existing 20 nanoscale technology, thereby reducing electricity consumption by 35 percent while improving the performance by 20 percent.

On the same note, the global tech company also recently decided to provide 14 Nano FinFET technology to its foundry competition “Global Foundries.”

Global Foundries is the global number two in the industry, next to TSMC, and currently provides mobile APs to Qualcomm. Samsung’s move this time is considered to be a stepping stone in its effort to secure Qualcomm as its client.