Samsung Electronics announced on January 13 that the company has made a deal with Qualcomm and that the South Korean company will be the sole manufacturer of Qualcomm’s latest flagship chipset. This could be a major boost for the electronics company, given the fact that according to some analysts, the value of the contract could go as high as $1 billion. Up until now, Qualcomm never used foundries other than TSMC to make high-end chipsets, so the deal is quite surprising. The Snapdragon 820, which is likely to be used by the majority of the high-end smartphones that are going to be released this year, will be manufactured by Samsung using the new 14nm LPP process.
The recent deal could get both companies out of the dark, which would be a great thing, given the fact that 2015 wasn’t the best year of neither of them. Qualcomm had a tough 2015, mainly because the Snapdragon 810 wasn’t the high-end product with class-leading performance that everyone expected from the company. The chipset overheated, causing some manufacturers, like Samsung for example, to drop Qualcomm as the supplier of their smartphones’ chipset. The Snapdragon 820, however, promises to be a lot more efficient and it seems that it will live up to expectations, so the company should make a great comeback.
The South Korean company also needs the deal because there was a slow demand for consumer electronics and components. Both companies have to gain from the deal, even if this order won’t be by itself enough to totally rejuvenate the South Korean company’s earnings. Qualcomm may be hoping for Samsung to use the Snapdragon 820 in its future handsets, and it was already rumored that this year’s Galaxy S7 will be powered by Qualcomm’s chipset, or at least some of the new smartphones will, and others will have the Exynos 8 octa chipset.