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Samsung chip division ‘humiliated’ over Snapdragon Galaxy S20 for Korea

The Exynos vs Snapdragon debate has heated up again. Several reports have highlighted the differences between the two chipsets with Qualcomm’s Snapdragon 865 edging out Samsung’s Exynos 990 processor. It’s evident that in the Snapdragon 865 vs Exynos 990 fight, Qualcomm has emerged on the top.

Samsung continues to sell both Snapdragon and Exynos variants of its flagships. It ships the Exynos variants in most markets while markets like the United States and China get the Snapdragon variant. This year it decided to make a significant change for its home country of South Korea. The Galaxy S20 lineup comes with the Snapdragon 865, not the Exynos 990 in South Korea.

Samsung’s chip division tried to get the decision reversed

Qualcomm chips are evidently more efficient than their Exynos counterparts. More efficiency translates to improved battery life and that’s something that directly impacts customers’ experience with Samsung’s handsets. The end result is that some customers feel that they got a slightly inferior product even though they paid the same amount of money as customers in regions where the Snapdragon variants are sold.

Samsung’s shareholders grilled company executives at the recent general meeting about the Exynos chip’s struggles and if there was a plan to improve it. President of Samsung’s mobile division DJ Koh said that Samsung Electronics doesn’t just stick with the Exynos chip because it generates a significant chunk of revenue for the company’s System LSI division, it’s the branch that makes the Exynos chip, but that this decision is made based on “competitive logic.” However, local media reports at that time suggested that the explanation hadn’t adequately addressed shareholders’ concerns.

A report out of South Korea mentions that the decision to ship the Snapdragon Galaxy S20 in South Korea took many at Samsung by surprise, not just at its offices in South Korea but also at the US headquarters. This decision was reportedly made because the Exynos 990 didn’t quite meet performance expectations even after multiple evaluations. Since the 5G push was critical for Samsung’s marketing strategy for the Galaxy S20, the company have decided to favor the more efficient Snapdragon 865 for South Korea, which was the first country to fire up commercial 5G networks and has seen rapid deployment of the next-gen mobile network since last year.

The report also mentions rumors that floated in the company that the System LSI Division had felt “humiliated” because of the decision to ditch the Exynos in favor of the Snapdragon for South Korea. Officials reportedly tried to convince the mobile division to reverse the decision but that obviously did not happen. There’s little evidence to back up these rumors but they do make some sense. It would have been a matter of pride for workers at System LSI and they might not be too happy about seeing a chipset that was designed, engineered and manufactured in South Korea for the flagship series of a company that is a titan of the South Korean industry to not be picked for variants meant for South Korea. That’s gotta hurt.

Samsung may not be giving up on its Exynos chips despite these performance concerns because they still provide the company with leverage against Qualcomm. If the company didn’t have an alternative, it would be completely at Qualcomm’s mercy for chips and may not have much wiggle room in price negotiations. It’s hard to imagine that Qualcomm wouldn’t want to sell chips to Samsung given the kind of numbers that its flagship smartphones sell but in such high-stakes negotiations, it’s always a good idea to have some leverage.

Keeping the Exynos program alive is also part of Samsung’s plan to diversify its revenue streams. The company has been selling chips to several other manufacturers as well. Companies like Vivo are gradually shifting some of their models to Exynos processors. Samsung’s profits took a huge hit last year because of the slowdown in the memory market so the Exynos program can provide a buffer against price shocks for the semiconductor business.

The performance gap between the Exynos and Qualcomm chips is largely down to the former using custom CPU cores. Samsung may have decided to fix this once and for all by ditching custom CPU cores altogether in favor of licensing ARM designs going forward. Some reports have even claimed that Samsung could collaborate with ARM for semi-custom cores. It’s all a bit up in the air right now but it’s evident that the Exynos program is far from done. We know that Samsung fans have had it with the Exynos processors just not being as good as their Snapdragon counterparts. Hopefully, the company has a plan to turn this around.

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