Samsung is reportedly said to have lost a once-in-a-lifetime opportunity to TSMC to mass-produce Qualcomm's next flagship smartphone chipset, the "Snapdragon 8 Gen 4," which is scheduled for release in 2025. TSMC plans to use its second-generation 3nm "N3E" node for Qualcomm's product next year, and other companies such as MediaTek are also expected to use this manufacturing process.
Dual-Sourcing Strategy with Samsung Appears to Have Fallen Through
TSMC plans to significantly expand its 3nm process production in 2024. Currently, the company only offers the "N3B" node, which is used exclusively for Apple's A17 Pro and M3, but in 2024 it plans to also bring the "N3E" node online. Since the N3E node improves both yield and wafer pricing, adopting this technology should fall within an acceptable cost range for Qualcomm. Samsung was originally ahead in developing 3nm process technology, but according to TrendForce, Samsung's conservative approach to transitioning to the 3nm process led to the loss of this Snapdragon 8 Gen 4 order.
Previously, it was rumored that Qualcomm would switch to a dual-sourcing strategy utilizing both Samsung's and TSMC's 3nm technologies to mass-produce the Snapdragon 8 Gen 4. By having two companies bid instead of relying on just one, Qualcomm would be able to lower the manufacturing costs of the chipset. Unfortunately, these plans did not materialize, and in the end Qualcomm's supplier ended up being TSMC alone. As previously rumored, this may also be due to the possibility that Samsung's 3nm GAA yield was too low for Qualcomm to accept. Earlier reports suggested that Samsung would need to raise its yield to at least 70% in order to secure the order.
There is also the issue that Samsung's 3nm technology is inferior to TSMC's. While this remains at the level of rumor, it doesn't seem far-fetched given that the Snapdragon 8 Gen 1, manufactured by Samsung Foundry, suffered from power consumption and heat issues, whereas the Snapdragon 8+ Gen 1, which subsequently switched to TSMC manufacturing, achieved a remarkable performance boost, showing a striking difference in both performance and power efficiency. The Snapdragon 8 Gen 2 and Snapdragon 8 Gen 3 have continued this trend, becoming highly regarded products.
The Snapdragon 8 Gen 4 is said to be Qualcomm's first smartphone SoC to feature the company's custom Oryon cores. Qualcomm plans to move away from Arm's CPU designs in 2024 in order to compete with Apple's A-series chips. However, the switch to custom CPU designs, combined with mass-producing silicon on TSMC's N3E process, means the Snapdragon 8 Gen 4 will likely be more expensive than the Snapdragon 8 Gen 3. As a result, manufacturers may be forced to make compromises, such as cutting certain features, in order to maximize profits on their flagship smartphones.
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