Samsung has faced a major setback as it has lost the contract to manufacture Qualcomm’s flagship Snapdragon 8 Elite Gen 2 chip. Qualcomm has decided to give the entire production to Taiwan Semiconductor Manufacturing Company (TSMC). This decision has further strengthened TSMC’s position as a leader in advanced semiconductor manufacturing.
Qualcomm's choice shows its preference for reliability over cost savings. While Samsung may have offered lower production costs, its recent struggles with low production rates seem to have played a significant role in the decision. These production issues have made big clients including Qualcomm, hesitant to trust Samsung with their critical projects. Although Samsung has made progress in improving its 3nm production process and is working on advanced 2nm and 1.4nm technologies, it has not been able to overcome its image of being less reliable in manufacturing advanced chips.
TSMC, on the other hand, will manufacture the Snapdragon 8 Elite Gen 2 chip using its advanced N3P process. This highlights TSMC’s reputation for consistently delivering high-quality performance and innovation. This loss does not only affect Samsung’s semiconductor business but also its mobile division. Since the Snapdragon 8 Elite Gen 2 chip is expected to be more expensive, it may lead to higher costs for premium smartphones including Samsung’s Galaxy series. To tackle this challenge, Samsung is exploring other options to reduce its dependence on external suppliers. It is considering reviving its Exynos chip series or working with companies like MediaTek. While these efforts might help in the short term, Samsung will need to focus on improving its efficiency and reliability to regain its competitive edge in the semiconductor industry.
