Taiwan Semiconductor Manufacturing Company (TSMC) has been selected as the sole manufacturer of Qualcomm’s upcoming Snapdragon 8 Gen 4 chipset. This decision marks a significant shift in Qualcomm’s manufacturing strategy, as the company initially planned to dual-source the chipset from both TSMC and Samsung. However, this plan was abandoned due to yield and capacity issues with Samsung’s 3 GAP node.
The Snapdragon 8 Gen 4 is a pivotal component in Qualcomm’s smartphone application processor (AP) roadmap, as it will be the first to feature Qualcomm’s self-developed Oryon cores. There was considerable speculation in the industry about who would fabricate this crucial chipset.
While some sources suggested TSMC, others believed Samsung would be the manufacturer, and yet another group thought it would be dual-sourced. However, Taiwanese news has now confirmed that TSMC will be the exclusive manufacturer, utilizing its N3E node for production.
Qualcomm’s decision to opt for TSMC’s N3E process was influenced by Samsung’s focus on prioritizing its in-house Exynos 2500 (also known as the Dream Chip, depending on the source) over its competitor’s products. This situation left Qualcomm with no choice but to select TSMC for its Snapdragon 8 Gen 4 production.
However, this move may come at a higher cost for Qualcomm. TSMC’s N3E fabrication space is highly sought after, with Apple already reserving a significant portion of its capacity. Additionally, Intel and MediaTek are also planning to manufacture some components using TSMC’s N3E technology, which further limits the available capacity for Qualcomm.
This constraint on manufacturing capacity could be one of the reasons behind Qualcomm’s earlier announcement about dual-sourcing SoCs from both Samsung and TSMC. The plan was for Samsung to produce mid-range chipsets and TSMC to handle the high-end models. As a result, smartphones featuring the Snapdragon 8 Gen 4 chipset are expected to become more expensive, a possibility Qualcomm hinted at during the Snapdragon 8 Gen 3 launch.
The exclusive partnership between Qualcomm and TSMC for the Snapdragon 8 Gen 4 underscores the competitive dynamics in the semiconductor industry and highlights the strategic decisions companies must make in response to manufacturing challenges and market demands.
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