A Contract Worth US$1 Bil.
Samsung Electronics will produce all of Qualcomm's AP chips for next-generation smartphones.
Samsung Electronics' foundry division has won a contract to produce the Snapdragon 875 (tentative name), Qualcomm’s latest application processor (AP), in a 5-nanometer process.
The Snapdragon 875 is Qualcomm's 5G AP chip for premium smartphones and is scheduled to come out in December. Samsung Electronics’ Galaxy S21 (tentative name) and high-end phones of China's Xiaomi and Oppo will be powered by the new Qualcomm AP.
This is the first time that Samsung Electronics has won the entire order volume for a flagship Qualcomm product. The size of the contract is reportedly close to US$1 billion. Samsung Electronics has recently started volume production of the Snapdragon 875, using extreme ultraviolet (EUV) lithography equipment at its foundry line in Hwaseong, Gyeonggi Province.
The size of the global foundry market reached US$65.5 billion in 2019, said market research company TrendForce. The market is growing with sales of the top 10 foundry companies already hitting US$57.2 billion in the first three quarters of 2020.
An increase in demand for 5G and artificial intelligence (AI) semiconductor chips is sparking off the rapid growth of the foundry market. As orders keeps flowing into such fables companies as Qualcomm, Nvidia and AMD, the foundry market is growing on contract manufacturing for them.