The pandemic has wreaked havoc on the chip industry. It is now experiencing a global chip shortage that has never been seen before. Even though the industry’s major players are taking steps to improve the situation, the shortage is far from over.
Although Qualcomm is one of the largest suppliers of mobile chipsets, it is completely reliant on third-party manufacturers. Because the company does not have its manufacturing facilities, it must rely on Samsung and TSMC for capacity. Samsung’s latest agreement with TSMC could spell trouble for the company result of Qualcomm and TSMC joining forces.
Qualcomm receives an unprecedented favor from TSMC (Qualcomm and TSMC).
Qualcomm’s high-end chipsets have been produced by both Samsung and TSMC. For the 2019 and 2020 chips, it went with the latter, but for the Snapdragon 888, it went back to Samsung. Despite rumors that it would return to TSMC, Qualcomm’s next-generation flagship processor would be manufactured by Samsung, according to a report published last month.
In the chip market, it’s not just a lack of available manufacturing capacity that’s causing issues. Wafers and packaging substrates are also in short supply. All of these issues are forcing businesses to reconsider their strategies to avoid future business disruption.
According to industry sources, Qualcomm and TSMC are taking a significant step to strengthen their relationship. TSMC has agreed to manufacture a batch of high-end 5G chips for Qualcomm on a priority basis, despite the strain on its manufacturing capacity. It is unclear which chips TSMC has decided to accommodate, but this would be an unprecedented favor extended to Qualcomm by the Taiwanese manufacturer.
Even if they don’t, Samsung may struggle to find enough Qualcomm chips to put in its flagship devices. The chip shortage has the potential to harm Samsung on multiple fronts. They may incur financial losses as a result of producing chips for Qualcomm.
As previously stated, the company could also miss out on Qualcomm’s next high-end chip. Depending on the market, smartphones such as the Galaxy S21 have two different chipsets. Qualcomm’s Snapdragon chips, on the other hand, outperform Samsung’s Exynos chips in other markets.
As a result, users will notice a noticeable performance improvement. Only time will tell if Qualcomm and TSMC collaboration will truly harm Samsung.
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