Samsung loses bid to produce Qualcomm Snapdragon 8 Elite 2 chip, semiconductor sector sinks further into crisis

Samsung has once again missed out on becoming Qualcomm's top chip manufacturing partner. According to Korean news outlet The Bell, TSMC has beaten Samsung to become the winning company for Qualcomm's upcoming Snapdragon 8 Elite 2 chip project. This victory was largely due to the advanced 3-nanometer (nm) (N3P) process, which has helped the Taiwanese semiconductor manufacturer reap countless successes in recent times.

According to The Bell, Samsung had a near-exclusive monopoly on Qualcomm's chip production until 2021, when it produced the Snapdragon 8 Gen 1. Subsequent issues led Qualcomm to switch to TSMC, to Samsung's detriment.

According to The Bell, Samsung was almost the exclusive chip manufacturing partner of Qualcomm until 2021, when it used Snapdragon 8 Gen 1. However, a series of problems later related to the performance and stability of the processor forced Qualcomm to reevaluate the cooperation agreement with Samsung and gradually turned to TSMC. This caused the semiconductor manufacturing division of the Korean giant to suffer heavy losses.

Samsung offered to manufacture the Snapdragon 8 Elite 2 chip using its 3nm process, but Qualcomm is now reportedly sticking with TSMC. With companies under pressure from tougher economic conditions and supply chain disruptions, Qualcomm is unlikely to risk another deal with Samsung, given the problems the two companies have had with their joint products in the past.

Samsung has been struggling with yield issues for quite some time with its 3nm GAA process, leaving Qualcomm with no choice but to go with TSMC's proven solution. Qualcomm is expected to announce the Snapdragon 8s Elite early next year, which is positioned as a less premium version of the Snapdragon 8 Elite, and the Korean company has not received any orders either.

Analysts believe that Samsung will try to get back into the game by producing the Exynos 2500 chip, which is expected to appear in high-end phones in 2025, possibly including the Galaxy Z Flip 7. If successful, the Korean manufacturer could have a bigger partnership prospect with Qualcomm.

Samsung is expected to bid for the production of the Snapdragon 8 Elite 3, which is scheduled to launch in 2026. The chip will be manufactured using a 2nm process. Samsung's Taylor Foundry in the United States will focus on the 2nm process, and could start operations as early as 2026, in time to take orders from Qualcomm if all goes well.