It has been a bad year for Samsung. It also lost the Apple contract to produce its iPhone application processors (AP).
Samsung will not see all this impact straight away. It is entrusted to produce Qualcomm’s 10 nm APs and modem chips, but the operation rate of its factories will drop sharply starting from next year.
Qualcomm has been designing and developing its next-generation 7nm Snapdragon AP by using chip development tools distributed by TSMC since second half of last year.
It wants to mass produce 7nm Snapdragon APs between the end of this year and early next year after the first test wafer is manufactured from TSMC this September, and after it is done with designing the package and verification process.
Samsung Electronics’ foundry business saw sales last year of $4.44 billion. Sales from producing Qualcomm’s APs and modem chips are around $1.78 billion and they take up about 40 percent of entire sales from its foundry business.
The company has suffered because its 7nm chips were delayed. TSMC focused on developing a 7nm process while skipping over the 10nm process. Besides Apple, no one else really wanted customers with a 10nm process, which was what Samsung wanted to make.
Samsung concentrated on the 10nm process because it thought it would last for a long time. Samsung Electronics recently added an 8nm process between 10nm process and 7nm process.
However the 8nm process is a ‘minor upgraded version’ of the 10nm process that has reduced the width of some circuits and shares the same development tools as 10nm.
The next-generation Exynos AP, which will be mass-produced by Samsung Electronics’ System LSI Business Department early next year, will be produced using a 8nm process.
Mass production of Samsung Electronics’ 7nm chips will be possible in second half of next year when next Galaxy Note series is planned to be released.
Meanwhile TSMC supplied its 7nm process kit to its customers during second half of last year, Samsung Electronics’ first beta version of the 7nm process is supposed to be out in this July.