Samsung has reportedly lost Qualcomm’s 5nm chip orders to TSMC

Samsung announced the completion of its 5nm process node last year and started setting up new production lines thereafter. It was then said that the company will begin mass production of 5nm chips from Q2 2020.

An earlier report had revealed that Samsung will manufacture the Snapdragon 875G and the Snapdragon 735G chipsets for Qualcomm on this process. However, a new report out of China claims that the company has lost a chunk of its orders to TSMC.

Samsung is still going to be a part of the supply chain

TSMC has already begun mass production of 5nm chips like Apple’s A14 chipset that will be used in its upcoming iPhones. On the other hand, it was reported two weeks ago that Samsung was struggling to improve the yield of 5nm chips. The less than ideal yield could end up delaying the launch of Qualcomm’s chip, something that the company would obviously not want to happen.

The report from China claims that Qualcomm has now turned to TSMC for assistance. This means that the bulk of the orders will now be manufactured by TSMC. Its current production capacity of 5nm chips is around 60,000 units per month and is already believed to be operating at max capacity. The company is likely going to expand its capacity by up to 90,000 units per month in order to meet increased demand.

Qualcomm may not give TSMC all of the orders because it wouldn’t want to be placing all of its eggs in one basket, or in this case, with one manufacturer. Splitting orders would also enable Qualcomm to gain some pricing leverage as it’s already believed that Samsung has been aggressively undercutting its semiconductor rivals on price as it looks to increase its share in this market.

Samsung may only be able to supply a small fraction of Qualcomm’s total orders for 5nm chips as it continues to struggle with yield issues, though.

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