Samsung has revealed that it has started mass producing Qualcomm’s Snapdragon 820 chip utilizing a second generation of its 14 nanometer Low Power Plus (LPP) chip manufacturing process. The South Korean tech giant has been looking to further expand its processor manufacturing division, and landing the Snapdragon 820 gig marks a big step towards achieving that goal. Also, in light of its recent struggles in its smartphone business, it should help alleviate things a bit for Samsung. Moreover, with the exclusive deal estimated to be worth over a billion dollars, it is a huge job order for the company.
Samsung first made use of its 14 nanometer method in 2015 in the production of its own Exynos 7 Octa processor before later applying it to other devices for the rest of last year. The process is more thin compared to chip sets made by Taiwan Semiconductor Manufacturing Co (TSMC), a competitor of Samsung’s which builds processors for numerous phone makers around the world. Incidentally, Qualcomm is one of TSMC’s biggest clients, and the fact that Samsung has acquired the chip making job should be a blow to the Taiwanese firm. On top of that, Samsung also claims that the processors it is building has significantly more power efficient.
According to Samsung, the Snapdragon 820 chip will likely start to feature in mobile devices that are shipping within the first six months of 2016. The company, however, did not reveal if the processor will be part of upcoming Samsung handsets such as the highly anticipated Galaxy S7, the phone maker’s next flagship device.
Expanding its efforts in the processor manufacturing business could be a wise move by Samsung. It is no secret that the growth of the global smartphone market seems to be slowing in the last few months, and industry watchers are saying that the slump will likely continue in 2016. The first to suffer from the slump are mobile giants like Samsung who need to sell more units of their smartphones in order to make up for the rise in production costs. But by being busy in chip making, it could earn its revenues elsewhere, and with the increasing popularity of the concept of Internet of Things, wherein everything is connected, building processors such as the Snapdragon 820 could be Samsung’s ticket to another round of sustainable success. Along with LG, Samsung has already been tapped to supply the OLED panels for Apple’s future iPhone devices, so playing supplier to phone makers may not be that bad after all.
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