Samsung’s low chip yield prompts Qualcomm to switch its business to TSMC

Samsung has launched a determined plan to grow its chip business by producing semiconductors for other companies. However, one of its biggest customers, Qualcomm – is now seeking TSMC services due to the low yield of Samsung Foundry.

According to a recent report by Korean media TheElec, Qualcomm is also asking TSMC to be part of its 4nm Snapdragon 8 Gen 1 chipset. Although Samsung is listed as the sole manufacturer of the foundry chip, it was first announced.

This decision comes as no surprise as Samsung foundry’s yield of only 35% for the Snapdragon 8 Gen 1. This also means that Qualcomm will partner with TSMC for its upcoming 3nm SoCs. The report states that the Exynos 2200 yields less than the Qualcomm chip.

As per the report, Qualcomm executives and technicians are physically present at Samsung’s foundry units to oversee the production of the Snapdragon 8Gen1. This explains why the Qualcomm chip yields better than Samsung’s own Exynos 2200. However, Qualcomm’s decision to go to TSMC indicates that the yield problem may not be completely resolved.

Last year, tech giant NVIDIA moved orders to TSMC for its new 7nm GPUs due to Samsung’s yield issues. In addition, global chip shortages are putting severe pressure on suppliers to meet demand.

Samsung has previously said it will spend $100 billion over the next few years to expand its chip business. We can see some of them coming to fruition soon as the company is going to produce 3nm chips later this year. Meanwhile, TSMC has cemented its position as a leader in the chip industry.