The conglomerate’s foundry service will utilize its 4nm node to fabricate the chipset and its Snapdragon X62 sub-model.
The South Korean giant outlined its plans to bolster its foundry business this year with its Q4 2020 earnings release.
How Samsung Benefits From Making Qualcomm’s New 5G Chips
Samsung’s new supply deal with Qualcomm should benefit the conglomerate in a few different ways.
First off, the contract will enable the firm to improve its bottom line with the near billion dollar cash infusion. That deal should push the company’s foundry unit to a third consecutive quarter of record sales. Given that it is spending $116 billion to build its position in the semiconductor industry, the pact will undoubtedly please its shareholders.
Secondly, the arrangement enables Samsung to show off its cutting-edge manufacturing process. Last month, the firm revealed it had designed a 4nm node. According to Business Korea, it will bring Qualcomm’s new chipsets into mass production in the second half of this year.
If its node is well-received, Samsung could land similar fabrication contracts with other smartphone modem makers like MediaTek.
Third, the deal will help the corporation make its flagship smartphones even better. Although it designs its own components under the Exynos brand, its hardware is not as well-regarded as Qualcomm’s Snapdragon products. By using its state-of-the-art fabs to make the new modems, it can equip its next-generation Galaxy S and Note handsets with best-in-class chips.
Plus, since the X65 and X62 modems support millimeter-wave and Sub-6GHz bands, they can facilitate worldwide 5G device launches. With former leading provider Huawei significantly reducing its presence, Samsung could use Qualcomm’s latest modems to expand its global market share.
Qualcomm’s Smart Business Strategy
Last month, Qualcomm CEO-elect Cristiano Amon expressed great enthusiasm about its work in the 5G space. The executive called the technology “one of the single greatest opportunities” for the fabless company. By enlisting Samsung to make its X65 and X62 platforms, the firm will move closer to realizing the full potential of fifth-generation connectivity.
When the corporation debuted the modem, it hailed its capability as a smartphone chipset. In addition to supporting both 5G frequency types, it can facilitate connections up to 10 Gbps. It also has embedded features that optimize battery life, spectrum aggregation, and upload speed. Its 4nm architecture could outpace any fifth-generation modem on the market in terms of performance.
Qualcomm should enjoy a significant spike in part sales and licensing fees if it makes the defining 5G connectivity components. A best-selling X65 or X62 powered smartphone will also cement the corporation’s position as a global leader in the fifth-generation networking field. That reputation boost can help it gain traction in the IoT, automotive, and virtual reality headgear markets.
With its industry-leading technology, Qualcomm can dominate the wireless technology sector for the foreseeable future. And given its expansive advanced foundry space, Samsung should be able to keep up with its production orders. By working together, the two chipmakers are carving a path toward considerable long-term growth.