Qualcomm to give all its 3nm AP foundry work to TSMC instead of Samsung

Qualcomm has given the foundry order for its 3-nanometer (nm) application processor launching next year exclusively to TSMC, TheElec has learned.

The US chip giant has also given some of the foundry work for its 4nm application processor, the Snapdragon 8 Gen 1, to the Taiwanese chip giant, which it previously gave solely to Samsung Electronics, sources said.

TSMC, after receiving the order last year, has already put in the wafers for the chips that will be delivered to customers during the second quarter, they said.

Qualcomm made the decision to rely on TSMC more than Samsung as the latter is facing yield problems for its advanced process nodes, the sources said.

Samsung Foundry, the Korean tech giant’s contract chip-making business unit, is seeing a yield rate of around 35% for the Snapdragon 8 Gen 1, while the yield rate for Exynos 2200 is even lower than this, they added.

The higher yield on Snapdragon compared to Exynos was due to Qualcomm sending an executive and engineers to Samsung Foundry’s production site, which helped with solving some of the problems, one of the sources said.

But Qualcomm decided to add TSMC as a foundry for the chip as well as it believed it couldn’t sit back when the yield is so low amid the global chip shortage, they said.

Qualcomm told as such to Samsung mobile president TM Roh when he visited the US last year. 

Samsung is auditing Samsung Foundry due to the failure of the business unit to meet the volume required by its mobile business unit as well as key customer Qualcomm, they added.

The decision by the US chip giant is a critical hit for the Korean tech giant as it has already lost the foundry order for Nvidia’s 7nm graphic card to TSMC last year.

If Qualcomm and Nvidia decide to wholly rely on TSMC going forward, Samsung would be losing two of the biggest fabless customers that foundry companies rely on for revenue.

However, Qualcomm has decided to continue to give the order for its 7nm RF chip to Samsung, with the promise to order more.