Why Qualcomm Prefers TSMC for Chip Manufacturing

What you should know

Samsung Foundry’s 3nm GAA process and TSMC’s 3nm FinFET process have a yield rate of 50%.
– Qualcomm is refusing to allow Samsung Foundry to build its chips until the yield rate reaches 70%.
– TSMC is taking the costs of defective 3nm chips for Apple under a special deal.
– Qualcomm may have to raise prices or make hard decisions if the yield rate doesn’t improve for Samsung Foundry.

Full Story

Both Samsung Foundry and TSMC are experiencing a yield rate of 50% for their respective 3nm process nodes, according to reports. Samsung’s 3nm node incorporates Gate-All-Around (GAA) technology, which enables the transistor to be in contact with the channel on all four sides, resulting in reduced current leakage and increased drain current. On the other hand, TSMC will only implement GAA technology when it reaches the 2nm stage.

Qualcomm, a major chip designer, has reportedly refused to allow Samsung Foundry to produce its chips until the yield rate reaches 70%. The yield rate refers to the percentage of dies that pass quality control compared to the total number of dies from a silicon wafer. Qualcomm still has to pay for all the dies, regardless of whether they pass or fail QC. In comparison, TSMC has offered Apple a favorable deal whereby it absorbs the costs of any defective 3nm chips.

At a 50% yield rate, Qualcomm would likely have to increase the prices of its Snapdragon chips to compensate for the expenses of defective chips from Samsung. The utilization of the 3nm process node allows for smaller transistors and a higher transistor count, resulting in more energy-efficient and powerful chips. Presently, the only smartphone employing a 3nm chip is Apple’s A17 Pro used in the iPhone 15 Pro models.

Despite delivering 3nm chips to a Chinese bitcoin company this year, Samsung has faced challenges in producing 3nm chips for smartphones. Qualcomm had previously relied on Samsung for its 5nm Snapdragon 8 Gen 1 application processor. However, a yield rate as low as 35% prompted Qualcomm to switch to TSMC for the production of the Snapdragon 8+ Gen 1.

If Samsung Foundry fails to reach a 70% yield rate in time to secure Qualcomm’s business and if production capacity is limited in Taiwan, Qualcomm may be faced with difficult decisions. These could include turning to Samsung Foundry regardless of the yield rate or developing the Snapdragon 8 Gen 4 SoC on a 4nm process node. It is worth noting that Qualcomm has recently ruled out using Intel for the production of its Snapdragon chips, according to analyst Ming-Chi Kuo.

Derrick Flynn
Derrick Flynnhttps://www.phonesinsights.com
With over four years of experience in tech journalism, Derrick has honed his skills and knowledge to become a vital part of the PhonesInsights team. His intuitive reviews and insightful commentary on the latest smartphones and wearable technology consistently provide our readers with valuable information.


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