Qualcomm chooses TSMC again for the production of Snapdragon 8 Elite Gen 2 chipsets. This choice was driven by low efficiency rates in Samsung’s 3 nanometer (nm) GAA (Gate-All-Around) process. So much so that the technical difficulties faced by Samsung in this process seem to have weakened its competitiveness in the industry. In contrast, TSMC’s ability to achieve high yield rates in 3nm production led Qualcomm to view TSMC as a more reliable partner.
The problems Samsung has experienced in the 3nm GAA production process are not new. Although the company was the first manufacturer to switch to this technology in 2022, it could not increase its efficiency rates. Currently, it is stated that only 20 of every 100 chips produced are functional. On the other hand, the ‘N3P’ production process developed by TSMC attracts attention with its efficiency rate exceeding 60%. While this ratio reinforced TSMC’s leadership in the industry, it was also one of the main factors affecting Qualcomm’s choice.
TSMC’s production superiority affects Qualcomm
TSMC stands out from its competitors not only with its high efficiency rates but also with its advanced technologies. The Taiwan-based manufacturer offers significant improvements in energy efficiency and performance with its ‘N3P’ process. produced by this process Snapdragon 8 Elite Gen 2It will provide increases in both energy savings and multi-core processing performance exceeding 20%. In addition, this chipset, which supports ARM’s Scalable Matrix Extension (SME) technology, can make a serious difference, especially in artificial intelligence and machine learning applications.
Samsung, on the other hand, could not receive orders not only for the Snapdragon 8 Elite Gen 2, but also for Qualcomm’s lower-performance Snapdragon 8s Elite chip. This situation greatly weakens Samsung Foundry’s competitiveness. While a dual-source manufacturing approach often provides cost advantages for chip designers, it was not possible for Qualcomm to implement this strategy due to Samsung’s low efficiency. Thus, TSMC became not only a reliable manufacturer, but also Qualcomm’s only option in terms of price.
The problems Samsung faces in 3nm GAA technology may cause the company to focus more on 2nm technology. According to the news, Samsung plans to use the 2nm production process in Exynos processors, which are expected to be introduced in 2027. In this process, better efficiency rates and performance are aimed. However, TSMC seems determined to hold the leadership in this field as well. The company plans to switch to 2nm production by 2025 and aims to reach high levels of efficiency in this process.
Qualcomm’s decision to continue with TSMC was shaped not only by technical superiority but also by timing advantage. The fact that competing products such as Apple’s A19 Pro processor will be released in 2024 increases Qualcomm’s need to quickly deliver a competitive product. TSMC’s reliable production capacity can help Qualcomm get ahead in this race.
Overall, Samsung’s difficulties in chip production are gradually narrowing the company’s market share. On the other hand, TSMC reinforces its leading position in the sector with both its technological superiority and high efficiency rates. On the other hand, Qualcomm’s collaboration with TSMC seems to strengthen not only the performance of the new generation chipsets but also the company’s position in the market.