Monday, September 14th 2020

Samsung Foundry to Become Sole Manufacturer of Qualcomm Snapdragon 875 on 5 nm EUV Manufacturing Process

Rumors fresh of South Korean shores claim that Samsung has snagged a position as sole provider for Qualcomm's Snapdragon 875 SoC on its 5 nm EUV manufacturing process. The reason for this, according to a supposed industry insider, boiled down to money (as it almost always does): Samsung simply offered lower pricing for chips manufactured under its 5 nm EUV process than TSMC did. The deal has been claimed to be worth some $840M. This makes sense, as Samsung has a considerable product portfolio - including lucrative memory fabrication - from which it can pool resources so as to lower pricing for new manufacturing technologies, whereas TSMC can only count on revenues it brings in from contracted silicon manufacturing deals.

Samsung's 5 nm EUV will still offer the now tried-and-true FinFet transistor design - next-generation GAAFET (gate all-around FET) are reserved for the companies' 3 nm efforts. This piece of news directly contradicts Digitimes' earlier reporting on Qualcomm leaving Samsung as a foundry partner due to lower than adequate yields for Samsung's 5 nm EUV. With Samsung already manufacturing NVIDIA's Ampere on its 8 nm node, and now with a confirmed high-volume client with Qualcomm, this likely means more available capacity for other TSMC clients - of which we could mention AMD and Apple.
Sources: Hankyung, Snapdragon 875 Image courtesy of WCCFTech
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15 Comments on Samsung Foundry to Become Sole Manufacturer of Qualcomm Snapdragon 875 on 5 nm EUV Manufacturing Process

#1
Vya Domus
Sketchy.

A couple of weeks ago Samsung was proudly announcing how they plan to make the best SoCs out there after falling behind with each passing year against Qualcomm. Part of that was because Qualcomm was using TSMC's nodes which were always superior, now suddenly we find out they're all going to be on equal footing.

Hmmm ... OK.
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#2
Assimilator
Coming so soon after the news that Samsung got NVIDIA, that's a pretty big win - but I wonder if the power characteristics of Samsung's 5nm are going to be equivalent to or better than TSMC's. I'm inclined to say no, which is not really a problem for NVIDIA but is definitely a concern for mobile devices. Perhaps Qualcomm is shooting itself in the foot here or perhaps TSMC is essentially becoming an Apple-only foundry? Considering what has happened to previous Apple partners (IBM, Intel, Imagination Technologies) it might be wise for TSMC not to be too short-sighted in chasing after profits, versus going for a diverse client base.

If TSMC really is that more expensive than going with a relatively unproven fab like Samsung, I'm expecting to see news of AMD CPUs and/or GPUs being manufactured by Samsung sooner or later. AMD does have some announcements coming up next month, so perhaps...
Vya Domus
Sketchy.

A couple of weeks ago Samsung was proudly announcing how they plan to make the best SoCs out there after falling behind with each passing year against Qualcomm. Part of that was because Qualcomm was using TSMC's nodes which were always superior, now suddenly we find out they're all going to be on equal footing.

Hmmm ... OK.
Nah, Snapdragon has always simply been a better design than Exynos. No process node advantage is going to magically make the latter good, at this point Exynos is merely a money-draining point of misplaced pride for Samsung.
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#3
Vya Domus
Assimilator
Nah, Snapdragon has always simply been a better design than Exynos. No process node advantage is going to magically make the latter good, at this point Exynos is merely a money-draining point of misplaced pride for Samsung.
The node difference definitely has something to do with it. Even though other SoCs used similar CPU cores or GPUs they were all more power efficient than Samsung's, even Apple rather famously used both TSMC and Samsung to source the same SoC once and Samsung's was considerably worse.
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#4
TheLostSwede
@Assimilator I think you misunderstand how big TSMC is. Sure, Apple could potentially have "bought out" the entire 5nm node production for now, considering they're moving to ARM based processors in so many more SKUs of their products. However, TSMC is never going to be an Apple only foundry, it's simply not in their best interest.
TSMC also has a lot of fabs and Apple wouldn't even want to produce on some of the nodes that TSMC manufacturers at.
en.wikipedia.org/wiki/TSMC#Facilities
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#5
Assimilator
TheLostSwede
@Assimilator I think you misunderstand how big TSMC is. Sure, Apple could potentially have "bought out" the entire 5nm node production for now, considering they're moving to ARM based processors in so many more SKUs of their products. However, TSMC is never going to be an Apple only foundry, it's simply not in their best interest.
TSMC also has a lot of fabs and Apple wouldn't even want to produce on some of the nodes that TSMC manufacturers at.
en.wikipedia.org/wiki/TSMC#Facilities
I know full well that TSMC has many fabs on many different nodes, but I'd expect that the majority of their cash comes from their smallest and newest nodes where they can charge a premium (necessary to cover the higher costs of the tech and R&D for said nodes).

And even if it doesn't, if they were to "bet the farm" on Apple taking all their newest node capacity and then get shafted, they'd be sitting with a massive amount of the most expensive node capacity idling. That's a big one, since node manufacturing contracts aren't particularly short-term or flexible.

Unfortunately, "best interests" sometimes take a back seat, particularly when executive compensation is tied to short-term profits.
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#6
midnightoil
Assimilator
I know full well that TSMC has many fabs on many different nodes, but I'd expect that the majority of their cash comes from their smallest and newest nodes where they can charge a premium (necessary to cover the higher costs of the tech and R&D for said nodes).

And even if it doesn't, if they were to "bet the farm" on Apple taking all their newest node capacity and then get shafted, they'd be sitting with a massive amount of the most expensive node capacity idling. That's a big one, since node manufacturing contracts aren't particularly short-term or flexible.

Unfortunately, "best interests" sometimes take a back seat, particularly when executive compensation is tied to short-term profits.
What would Apple produce? Why would they want all of 5nm? What are they going to sell? TSMC's capacity far exceeds one vendor.
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#7
Assimilator
midnightoil
What would Apple produce? Why would they want all of 5nm? What are they going to sell? TSMC's capacity far exceeds one vendor.
If TSMC's cutting-edge node capacity wasn't constrained, we wouldn't have news articles about it, nor would we have mobile SoC vendors (where power is most critical) switching to a less-proven manufacturer.

And Apple is Apple, they don't have to produce anything. If they decide to buy all of TSMC's cutting-edge node capacity (and not use it) just to prevent Qualcomm et al from having it, do you think TSMC would care?
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#8
midnightoil
Assimilator
If TSMC's cutting-edge node capacity wasn't constrained, we wouldn't have news articles about it, nor would we have mobile SoC vendors (where power is most critical) switching to a less-proven manufacturer.

And Apple is Apple, they don't have to produce anything. If they decide to buy all of TSMC's cutting-edge node capacity (and not use it) just to prevent Qualcomm et al from having it, do you think TSMC would care?
Of course it's constrained. It's not infinite. But it vastly exceeds one vendor's leading edge products.
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#9
BoboOOZ
Assimilator
If TSMC really is that more expensive than going with a relatively unproven fab like Samsung, I'm expecting to see news of AMD CPUs and/or GPUs being manufactured by Samsung sooner or later. AMD does have some announcements coming up next month, so perhaps...
Samsung is a huge company, they don't need to make money out of the foundry business yet.
Their price not only is lower, but they also offer special conditions, like the deal they have offered Nvidia where they are selling them only the good chips, not the whole wafer. This makes is a pretty sweet deal financially, with the only risk being availability, but I imagine that they can invest in order to improve yields. Also, from what I understand, the Samsung 5nm node is not so advanced compared to the 8 nm, which should mean that the risk isn't huge either.

Anyway, the fact that Samsung keeps investing and getting deals for the foundry is good for the market, it's keeping it sane and competitive. we wouldn't want a market in which there is only one well-performing foundry, it wouldn't be very good for the final users.
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#10
Assimilator
BoboOOZ
Samsung is a huge company, they don't need to make money out of the foundry business yet.
Their price not only is lower, but they also offer special conditions, like the deal they have offered Nvidia where they are selling them only the good chips, not the whole wafer. This makes is a pretty sweet deal financially, with the only risk being availability, but I imagine that they can invest in order to improve yields. Also, from what I understand, the Samsung 5nm node is not so advanced compared to the 8 nm, which should mean that the risk isn't huge either.

Anyway, the fact that Samsung keeps investing and getting deals for the foundry is good for the market, it's keeping it sane and competitive. we wouldn't want a market in which there is only one well-performing foundry, it wouldn't be very good for the final users.
Oh, I'm by no means upset that Samsung is getting a piece of the pie - especially since GloFo flopped so spectacularly. It's just that NVIDIA using Samsung for all of their consumer Ampere GPU production was very out of left field, especially considering that big green last used Samsung for lower-end Pascal parts, and skipped it entirely for Turing. But yeah, not being charged for defective dies - especially on a chip as large and complex as GA102 - is obviously a big financial win for NVIDIA.

It's just that until now, Samsung didn't really have any big orders from big US semiconductor designers. Now they've got two (NVIDIA and Qualcomm) in a relatively short period of time. While the financial incentive is definitely there, the conspiracy theorist in me wonders if US semiconductor companies are anticipating a China-Taiwan conflict that would impact supply lines...
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#11
GreiverBlade
well given how the Snapdragon version of the Note 20 Ultra outperform the Exynos version (and that with a cheaper cooling solution : simple graphite pad versus vapor chamber)by ~ 20%

Samsung should drop all the Exynos manufacturing line and prioritise Qualcomm :laugh: ....

that's quite a laugh to get a Note 20 Ultra same price, which is already too high for what it is, as the other one, but getting an Exynos instead of a SD ....
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#12
watzupken
Assimilator
Coming so soon after the news that Samsung got NVIDIA, that's a pretty big win - but I wonder if the power characteristics of Samsung's 5nm are going to be equivalent to or better than TSMC's. I'm inclined to say no, which is not really a problem for NVIDIA but is definitely a concern for mobile devices. Perhaps Qualcomm is shooting itself in the foot here or perhaps TSMC is essentially becoming an Apple-only foundry? Considering what has happened to previous Apple partners (IBM, Intel, Imagination Technologies) it might be wise for TSMC not to be too short-sighted in chasing after profits, versus going for a diverse client base.

If TSMC really is that more expensive than going with a relatively unproven fab like Samsung, I'm expecting to see news of AMD CPUs and/or GPUs being manufactured by Samsung sooner or later. AMD does have some announcements coming up next month, so perhaps...
I feel the main driver for people moving away from TSMC is likely the cost. I recalled there were some articles out there to say that the SD 865 is actually expensive to manufacture, thus, we see high mobile device prices. Not too sure about the power characteristic of Samsung vs TSMC 5nm, but considering that TSMC is more sought after by those with deep pockets, I would assume TSMC's fab should be better. Otherwise, I feel Intel would have gone with Samsung as well, instead of TSMC's 6nm.

In the short run, I doubt AMD will move anything to Samsung, from TSMC. I sense AMD's strategy to keep cost down at TSMC is to not go with the cutting edge fab, but instead let the bigger players like Apple take the lead. They will then fill in the gap when Apple and big players move on to the newer fab.
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#13
Assimilator
GreiverBlade
that's quite a laugh to get a Note 20 Ultra same price, which is already too high for what it is, as the other one, but getting an Exynos instead of a SD ....
TBH, if you're dumb enough to spend that much on a phone, you deserve to get ripped off regardless of who's making it or what's in it.

But I agree, European customers getting stuck with the POS Exynos while the rest of the world gets the much better Snapdragon is BS. If it was the USA, Samsung would've already been sued.
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#14
GreiverBlade
Assimilator
TBH, if you're dumb enough to spend that much on a phone, you deserve to get ripped off regardless of who's making it or what's in it.
aye, i fully agree on that ... which is why my last Samsung phone was a SGS2

(i love my TCL 10 Pro midrange price and spec , flagship build and serve me well for anything i could ask of it )
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#15
Bubster
Nobody mentioned this but the Chinese have been making strides as semiconductors and chip manufacturing...last i read a couple weeks ago that their main chip manufactures are being sanctioned by the US Gov. while the other manufacturers from Korea or Taiwan are fully booked...
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