Samsung lures Qualcomm’s cutting edge chip orders by using price cuts for 5nm

South Korean tech company Samsung Electronics’ chip division called Samsung Foundry used discounted prices to lure American chip giant Qualcomm Inc. to make orders for its latest generation smartphone processors with the foundry. The 5nm process is Samsung’s latest manufacturing node; Qualcomm is using it for its 2020 Snapdragon smartphone system-on-chip. Qualcomm has been one of the foundry’s few big customers as the rest of the companies flock towards their rival, Taiwan Semiconductor Manufacturing Company (TSMC), for their products.

Chinese publication house ITHome has reported about the price cuts by Samsung for its advanced 5nm process to solicit Qualcomm’s order at a time when the demand for high-end processors grows and its supplies, via foundries, remains more or less the same.

According to multiple research firms, the chip sector will grow considerably in the coming time. Consequently, the competition between Samsung Foundry and its only rival TSMC is expected to grow in the future. TrendForce, a research firm, has estimated that global foundry revenue will increase by ~24% year-over-year in 2020, due to the pandemic-induced economic shifts creating a surge in demand for consumer electronics.

TrendForce also believes that the chip sector will continue to grow in 2021, but at a slower pace,  or roughly by 5%. During this time period, both the rival companies, TSMC and Samsung, are expected to increase their production capacity for the 5nm node, and Samsung is expected to catch up to TSMC but not yet overpower it slightly. Specific estimates believe Samsung’s 5nm capacity will trail TSMC’s by 20% next year, as Samsung increases production due to an inflow of orders from Samsung LSI’s and NVIDIA Corporation products.

- Advertisement -720x200

Samsung share prices reach record high due to expected growth in Chip Industry

Samsung Electronics’ shares closed at a record on Seoul Exchange Market on 3 December

As analysts factored in the impact of a report from World Semiconductor Trade Statistics (WSTS), which forecasted a 5% growth for the chip industry this year, Samsung Electronics’ shares closed at a record high on the Seoul Exchange today. Despite TSMC’s tough competition, this record high was fuelled by optimism about the chip sector in the Korean industry.

In its report, the WSTS has estimated the total revenue for the chip sector pegged to be $433 billion. Of the 5% growth in the chip industry, 12% will be in the memory segment, where Samsung and SK Hynix, another Korean firm, are the dominant global players. Growth in the memory segment is followed by the sensor segment that is expected to post a 7.4% growth in 2020.

Worthy of note is that the firm also believes that growth in 2021 will outpace 2020. In 2021, the WSTS believes the semiconductor segment will grow by 8.4%, as it’s stimulated by the optoelectronics and memory sector, which are expected to post double-digit growth. Also in 2021, the memory segment is going to experience a demand growth which outpaces supply growth, and Samsung’s current share price has included all growth that its semiconductor arm is expected to witness next year.



Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Articles

Stay Connected


Hot Topics


Latest Articles


Exynos 2100 vs Snapdragon 888: Who wins the battle?

Exynos 2100, which Samsung recently launched, can be the turning point for its mobile chipset division. It is Samsung’s latest flagship processor and a...

Barcelona vs Athletic Club: Lineup and how to watch the Spanish Super Cup final live in India?

Athletic Club has been the surprise package of this tournament. They have eliminated Real Madrid in the semi-finals and hope to continue their stunning...

All the upcoming Indian web series in January 2021

In this pandemic situation, digital media is the most powerful way for entertainment. As usual Indian web series has made a mark on this...

Top 5 companies owned by Facebook Inc.

Facebook has been a game-changer in the social media industry. It was launched way back in 2004 by Mark Zuckerberg's Facebook Incorporation. The social...