Qualcomm and MediaTek Explore Samsung as Alternative Foundry Amid TSMC Price Hikes

Qualcomm and MediaTek are reportedly considering shifting their 2nm chip production to Samsung Electronics due to significant price increases from their current supplier, Taiwan Semiconductor Manufacturing Company (TSMC). TSMC has announced a 50% price hike for its 2nm wafers, which has raised concerns among its major clients, including Qualcomm and MediaTek, who are already facing rising costs associated with TSMC’s existing 3nm process. Qualcomm's CEO, Cristiano Amon, indicated that the company is exploring multiple options for contract manufacturing, suggesting a potential shift in supplier dynamics.

TSMC 2nm price hike might push Qualcomm and Mediatek to SamsungQualcomm, MediaTek Are Considering Shifting 2nm Chipset Production To Samsung As TSMC’s Price Hike Is Denting Their Profits“Our Competitor Is Also Our Very Good Customer,” TSMC CEO Says, Throwing Subtle Shade at the Attention Around IntelTSMC Announces the Intent to Rapidly Expand U.S. Operations, Introducing Cutting-Edge 2nm Chips With New Facilities in Arizona

Samsung has recently begun mass production of its Exynos 2600 using a 2nm Gate-All-Around (GAA) process, achieving yields of approximately 50%. This technological advancement positions Samsung as a viable alternative for Qualcomm and MediaTek, who are seeking to mitigate the financial impact of TSMC's price increases. Reports indicate that Qualcomm is evaluating a 2nm GAA version of its Snapdragon 8 Elite Gen 5 for future flagship models, while MediaTek has completed the tape-out of its first 2nm System on Chip (SoC), set for launch in 2026.

Qualcomm, MediaTek Are Considering Shifting 2nm Chipset Production To Samsung As TSMC’s Price Hike Is Denting Their ProfitsSamsung could handle the production of Qualcomm’s Snapdragon 8 Elite Gen 5 for Galaxy chipsTSMC 2nm price hike might push Qualcomm and Mediatek to SamsungSnapdragon 8 Elite Gen 5 chip to cost around $280/unit

The potential shift to Samsung could significantly alter the competitive landscape in the semiconductor industry. TSMC, which has long dominated the foundry market, may face challenges in retaining its clients if it cannot manage its pricing strategy effectively. The rising costs have already strained the relationship between TSMC and its clients, leading to speculation that Qualcomm and MediaTek may diversify their supply chains to include Samsung as a second source.

TSMC 2nm price hike might push Qualcomm and Mediatek to Samsung

Despite the potential benefits for Qualcomm and MediaTek, there are concerns regarding Samsung's ability to secure these partnerships. The company has faced reputational challenges in the past, which may complicate efforts to convince Qualcomm and MediaTek to pursue a dual-sourcing strategy. Critics argue that while Samsung's technological capabilities are impressive, its historical issues could deter companies from fully committing to a partnership.

Qualcomm, MediaTek Are Considering Shifting 2nm Chipset Production To Samsung As TSMC’s Price Hike Is Denting Their Profits

Qualcomm has not publicly confirmed its plans to shift production but has emphasized the importance of keeping options open in light of rising costs. Amon's comments reflect a broader sentiment within the industry regarding the need for flexibility in sourcing semiconductor manufacturing.

TSMC 2nm price hike might push Qualcomm and Mediatek to Samsung

• “Qualcomm boss Cristiano Amon did not name names but made his frustration fairly clear, saying the company was keeping “as many options as possible” open for its contract manufacturing.” — Cristiano Amon, CEO of Qualcomm

TSMC 2nm price hike might push Qualcomm and Mediatek to Samsung

• “If TSMC cannot tame its costs, Samsung might finally get the break it has been waiting for after its stumbles with 3nm, and Qualcomm could find that a little diversification goes a long way when your main supplier starts acting like a monopolist.” — Industry Analyst

TSMC 2nm price hike might push Qualcomm and Mediatek to Samsung

As Qualcomm and MediaTek evaluate their options, the semiconductor industry will be closely watching how these developments unfold. The potential partnership with Samsung could reshape the supply chain dynamics, especially as both companies prepare for the launch of their next-generation chipsets. The outcome of these negotiations will likely have significant implications for pricing and competition in the semiconductor market moving forward.

TSMC 2nm price hike might push Qualcomm and Mediatek to Samsung