Expanding Presence in Smartphone AP Market
Samsung Electronics' System LSI Business Division is planning to supply its smartphone application processor (AP) Exynos to Chinese smartphone makers Xiaomi, Oppo and Vivo in 2021.
Samsung is reportedly planning to supply its APs for some budget smartphones of the Chinese makers in the first half of 2021. Regarding APs for premium smartphones, which are mainly supplied by Qualcomm of the United States, Samsung Electronics will likely be able to supply them after gaining recognition for its technical prowess.
The Exynos AP had been mostly used for Samsung Electronics' Galaxy smartphones until the mid-2010s. Samsung Electronics' Wireless Business Division, which also used Qualcomm APs, leveraged the Exynos APs in negotiations with Qualcomm.
The System LSI Business Division has started to reduce supply of the Exynos APs to the Wireless Business Division because of a low profit margin and sought to secure new customers, focusing on Chinese makers. A good example is the supply of the Exynos 980 and 880 APs to Vivo in 2020.
Early this year, Samsung Electronics decided not to use the premium AP Exynos 990 for the Galaxy S20 model released to the Korean market, a setback for its premium AP. However, APs scheduled to come out are recognized for their high technological standards in the semiconductor industry. In particular, the 1080 AP, which is produced using the company’s 5-nm micro-fabrication process, will be loaded onto Vivo's 5G smartphone X60 and Samsung’s Galaxy A series. The Exynos 1080 reportedly uses the Coretex A78 CPU from ARM of the United Kingdom, which performs 20 percent better than its predecessor, and the Mali G78 GPU, which shows a 25 percent better performance than its predecessor. Industry sources say that the 1080 AP outperforms Qualcomm's flagship AP Snapdragon 865. In early 2021, Samsung will release the Exynos 2100.
Samsung Electronics is benefiting from sanctions on Huawei. While Huawei used an AP of it own development, Xiaomi and Oppo used APs from Qualcomm and MediaTek. Xiaomi and Oppo need to secure additional APs to expand production as Huawei is in trouble. Under these circumstances, the strong cost competitiveness of the Exynos AP attracted attention from the Chinese smartphone makers.
Samsung Electronics' status in the world's AP market is expected to rise to third place with the delivery of APs to Xiaomi. Samsung will be able to eat into the market shares of Qualcomm, the world's No. 1 AP company and MediaTek, the No. 2 player, both of which supply APs to Xiaomi and Oppo. In the second quarter of 2020, Samsung Electronics was tied for fourth place (13 percent) with Apple after Qualcomm (29 percent), MediaTek (26 percent), and Hi-Silicon (16 percent).