TSMC has once again demonstrated its dominance in the semiconductor industry by securing an exclusive deal with Qualcomm to mass produce the highly anticipated Snapdragon 8 Elite Gen 2 chip. This comes as a blow to Samsung, which had hoped to join Qualcomm’s supply chain to reduce costs. Unfortunately for Samsung, persistent yield issues with their 3nm GAA process have left Qualcomm with little option but to rely on TSMC’s proven capabilities.
Despite Samsung’s attempts to secure orders for the Snapdragon 8s Elite, the company faced another setback. Qualcomm plans to unveil the Snapdragon 8s Elite early next year as a slightly less powerful alternative to its flagship SoC, the Snapdragon 8 Elite. Unfortunately for Samsung, it did not manage to gain any orders for this chipset either, signaling deep troubles within its semiconductor division.
In contrast, TSMC appears to be on a roll. Its 2nm trial production has achieved an impressive 60% yield rate, which has bolstered Qualcomm’s confidence in the foundry. The Snapdragon 8 Elite Gen 2 is expected to be manufactured on TSMC’s improved 3nm ‘N3P’ node, promising enhancements over previous versions. Qualcomm is keen to gain an advantage in the fiercely competitive market as it prepares to compete with Apple’s upcoming A19 chip in the iPhone 17 lineup.
Both the Dimensity 9500 and the Snapdragon 8 Elite Gen 2 will benefit from ARM’s Scalable Matrix Extension technology, potentially offering a 20% improvement in multi-core performance. However, relying solely on TSMC may force Qualcomm to increase prices, affecting the profitability of its smartphone partners. Nonetheless, Qualcomm must stay competitive in the cutting-edge SoC market.
Meanwhile, Samsung’s failure to secure orders has effectively ended any hopes of a dual-sourcing strategy for Qualcomm, limiting its ability to negotiate better wafer prices with TSMC. The only hope for Qualcomm to lower costs lies in the possibility of MediaTek offering attractive pricing for the Dimensity 9500.
