Samsung’s contract chip manufacturing business is a cash cow for the company. The conglomerate makes a significant chunk of its revenues from this division. It’s also actively trying to win over more customers from TSMC, the leading contract chip manufacturer.
Qualcomm has often relied on Samsung’s foundry to manufacture its chips. It tends to split orders between Samsung and TSMC. Samsung did get a big chunk of the orders for the Snapdragon 8 Gen 1. Perhaps that’s why Qualcomm was one of Samsung’s top five customers for the very first time.
Samsung is still a major player in the chip manufacturing industry
Korean media reports that Samsung’s recent quarterly filing included a document that mentioned Qualcomm as one of its top five customers in the first quarter of this year. The top five companies in order are Apple, Best Buy, Deutsche Telekom, Qualcomm, and Samsung Electronics. For those who are unaware, the Exynos chips in Galaxy devices are also made by Samsung’s chip division.
This is the first time that Qualcomm has made it on the list but whether it remains there remains to be seen. It’s believed that Qualcomm’s upcoming Snapdragon 8 Gen 1+ chipset will be manufactured by TSMC. Qualcomm was reportedly looking to switch from Samsung due to yield issues with its 4nm node.
That’s not to say there’s still no significant demand for Samsung’s chip manufacturing capacity. The head of Samsung’s foundry market and strategy team Kang Moon-soo recently revealed that $158 billion worth of orders for its foundry business.
Samsung may also be looking to increase its margins on chip manufacturing to further improve profitability. It was recently reported that Samsung is in negotiations with clients to hike chip manufacturing prices by up to 20%.
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