Samsung Group To Drop Qualcomm Inc.’s Snapdragon 810 For Galaxy S6
A report by Bloomberg on Wednesday confirmed Samsung’s (OTCMKTS:SSNLF) decision to replace Qualcomm’s (NASDAQ:QCOM) Snapdragon 810 with its own microprocessor for its flagship device, Galaxy S6. As Samsung is among Qualcomm’s top customers, a pull-back from the South Korean company will significantly affect Qualcomm’s reputation and future business.
Although the processor is said to be used in most of the next generation smartphones, sources privy to the matter told Bloomberg that Snapdragon 810 got overheated in a test carried out by Samsung.
A similar news was reported by DigiTimes last week, claiming that the processor was hit by delays on the back of some technical issues. According to the report, Samsung will now use its own Exynos 14nm processor in the initial 80-90% of S6 devices, and will later switch back to Snapdragon once the problem gets resolved.
"Samsung will likely show off the new Galaxy S phone in about a month and a half, so one would have to assume that the chips have been tested a fair amount in order for them to be used," said HMC Investment analyst Greg Roh.
Samsung is set to move ahead in the chip market by developing advanced sensors. The South Korean company is becoming more self-reliant by increasingly manufacturing its own processors and baseband technology.
Qualcomm has so far dominated the smartphone market and has expanded its share with the release of the Snapdragon series. The Snapdragon 810 is an octa-core processor with four Cortex-A53 energy-efficient cores for background tasks and four Cortex-A57 cores for heavy tasks. Built on Adreno 430, the processor is capable of supporting HD and 3D resolutions as well as 4K video streaming. The processor is built on a 20nm chip that is manufactured by Taiwan Semiconductor Manufacturing Company (NYSE:TSM).
Qualcomm recently paired up with Huawei and EE to test the LTE Category 9 on the Snapdragon 810. The trio successfully achieved a record-breaking 410 Mbps download speed. The test proved 810’s capability to respond faster to applications, and maintain reliable and stable connections.
The news of Snapdragon’s delay is not new, as about a month ago, several sources including Bidness Etc confirmed that the processor would face delays in its delivery, owing to overheating and low speed. Mobile manufacturers such as Samsung, HTC, LG, and Sony were thought to lose their competitive disadvantage, as the rival Apple Inc. (NASDAQ:AAPL) had already launched its latest iPhone 6 and 6 Plus. Smartphones that are set to feature the 810 include HTC One M9, Xperia Z4, Galaxy S6, and LG G4.
Back then, Qualcomm responded to the rumors, confirming that the delivery will be on time.
In a recent report, JP Morgan also commented on the potential delay of Snapdragon 810. Analysts at the firm believe that the Snapdragon 810 will be delayed by at least three months, as it struggles for mass production.
A JP Morgan report read: “By our calculations (one month for prototyping and design fix and two additional months for completing the metal mask layers in final production). This would mean that high-volume availability of this chip would be likely only from mid-2Q15, at the earliest.”
The delayed Snapdragon isn’t Qualcomm’s only worry. The company undergoes a long-time investigation by the Chinese regulator, National Development and Reform Commission (NDRC). A decision is expected to be announced soon, and it is likely that Qualcomm will be required to lower its licensing charges and pay fines up to $1 billion.