Qualcomm versus Samsung?

There is an interesting reality show playing in the media featuring Qualcomm and Samsung with supporting actors TSMC, LG, Xaomi, and Apple. As I’m sure we all have read, Samsung is losing massive amounts of money on mobile which was once a very profitable business unit. Let’s take a look at the current landscape and some of the recent headlines to try and make sense of this thing. Sound like fun?


According to IDC the worldwide smartphone market hit close to 1.3 billion units in 2014. According to the world population clock there are more than 7.2 billion people on planet Earth with a net gain of one person every 16 seconds. Let’s also put the average smartphone replacement cycle at every two years. Smartphones are now an integral part of our quality of life so the market for the SoCs that power smartphones will continue to grow rapidly for many years to come, absolutely.

1. China	1,361,512,535	6. Pakistan	199,085,847
2. India	1,251,695,584	7. Nigeria	181,562,056
3. United States	321,362,789	8. Bangladesh	168,957,745
4. Indonesia	255,993,674	9. Russia	142,423,773
5. Brazil	204,259,812	10. Japan	126,919,659

Samsung still holds the number one position in the smartphone market but for how much longer? Samsung mobile posted negative numbers in 2014 and this year looks even more challenging. Apple is number two and gaining market share on the success of the iPhone6 and 6+. Xiaomi is now number three thanks to the China market and is rapidly expanding into India and other densely populated countries excluding the United States. Lenovo (including Motorola Mobility) is a strong number four and LG is fifth.

In regards to the SoCs inside these phones, QCOM, MediaTek, and Apple control the market with 80-90% market share depending on whom you believe. In 2014 the majority of these SoCs were 28nm from both TSMC (QCOM and MDTK) and Samsung (Apple iPhone5). At the end of last year Apple started shipping TSMC 20nm (iPhone6) and in 2015 SoCs will be a mix of 28nm, 20nm, and 14nm.

Having worked with Samsung in the past I can tell you they are a fierce competitor that knows no bounds so I find it highly unlikely that they will abandon the mobile market. I also find it highly unlikely that they will participate in a market that they cannot win so what is Samsung to do?

1. Pressure Qualcomm by rumoring that the Snapdragon 810 (TSMC 20nm) has heating problems? I spoke with friends inside QCOM when the story first broke and was told it would be proven false. While Samsung blamed the delay of the Galaxy S6 on QCOM, LG and Xiaomi released phones using the identical SoC with no reported problems.
2. As I mentioned before QCOM will use Samsung’s 14nm process but now I must ask: Is there more to this story? Will the QCOM 14nm SoCs be made available to all smartphone vendors or just Samsung? QCOM will also use TSMC’s 16nm FF+ so maybe this is the real reason for the split?
3. Have QCOM take over Exynos and develop the chips for Samsung? This would be my recommendation.

Bottom line: I see the foundry business as playing a key role in the competitive battle amongst the mobile vendors and the SoC makers may be forced to choose sides.