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Samsung May Regain Market Leadership in Application Processors, Foundry
System Semiconductors
Samsung May Regain Market Leadership in Application Processors, Foundry
  • By matthew
  • July 29, 2014, 06:06
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Samsung Electronics could see the recovery of its system semiconductor businesses, which has seen the most trouble in their semiconductor businesses. Samsung Electronics might be able to regain market leadership in the mobile application processor (AP) and foundry (consignment production of semiconductors) areas.

According to the industry on July 28, Samsung Electronics will bid to supply next-generation APs to Apple and Qualcomm, based on their 14nm Fin-FET co-developed with Global Foundries, a foundry competitor, last April.

As a matter of fact, Samsung Electronics has been exclusively supplying APs to Apple so far, including the A6 on the iPhone 5. However, part of the AP of the iPhone 5S (A7) last year and most of 20nm A8s of the iPhone 6 were allocated to TSMC. Considering that 80 percent of Samsung Electronics’ foundry sales were to Apple, it is inevitable that business will shrink this year.

However, following Qualcomm’s announcement that their next AP will be 14nm, Apple will use it in their next model after the iPhone 6. Since TSMC currently has development plans for the 16nm process only, Samsung Electronics will be likely to supply two big mobile AP clients.

Furthermore, Samsung Electronics will load its own Exynos 5433 AP onto its strategic smartphone Galaxy Note 4 this coming September. This 64-bit AP enhanced performance and efficiency by applying octa-core multi-processing technology, which could freely drive four large high-quality cores and four small low-power cores.

Samsung has been using Qualcomm’s Snapdragon AP that combines a modem and an AP on one chip, called a mono-chip, in Samsung’s own smartphones. Exynos's one-chip competitiveness was weaker than Qualcomm’s, as AP mono-chip did not help to make smartphones thinner.

Samsung Electronics abandoned its previous strategy to stick to an AP mono-chip, and is now prepared to target budget phones by developing communication chips such as the Exynos Modem 300 supporting an Exynos-made AP and LTE-A.

According to IC Insights, on the other hand, TSMC ranked number one in the world’s foundry market last year with its sales of US$19.85 billion, a 17 percent increase from the previous year. Global Foundries, sharing the 14nm Fin-FET production process with Samsung Electronics, recorded sales of US$4.261 billion, a 6 percent growth from the previous year putting it in second place. Samsung Electronics ranked number four with US$3.95 billion in sales, a 15 percent increase from the previous year. Additional supplies of Samsung Electronics to manufacturers, including to its own smartphones, are expected this year.

In additions, the market share of Samsung Electronics in the mobile AP industry was 8.0 percent last year, but this dropped to 5.6 percent during the first quarter of this year.