Qualcomm appears to jump ship to TSMC for its 6nm and 7 nm process node slated for the second half of 2021 and will expand orders for TSMC’s 4nm and 5 nm process node in 2022. The move is an attempt to regain smartphone chipset market share after its rival, MediaTek, outperformed them since the third quarter last year.
Chip shortages from Samsung’s chipmaking division have hindered Qualcomm shipments
Samsung has been experiencing production hurdles on the 5nm process node which have subsequently hindered Qualcomm’s chipset shipments. The San Diego chip giant will be shifting to TSMC for advanced nodes manufacturing as a result.
Samsung offers a lower cost for chip manufacturing in comparison with TSMC and has been the main producer in advanced nodes to Qualcomm in recent years. And Qualcomm, being the largest client to Samsung, renders more negotiating power when it comes to production capacity and catered chip designs.
Some key parts of Qualcomm’s flagship processors adopt the 5nm process node manufactured by Samsung, but fractions in the supply chain surfaced last year. On top of that, Qualcomm’s power management chips carried in processors are made by China’s Semiconductor Manufacturing International Corporation, which was blacklisted by the US Commerce Department. Therefore, MediaTek was able to fill the void and take the lead in China’s 5G smartphone chipset market.
Qualcomm will replace MediaTek in becoming TSMC’s second largest customer
Qualcomm will replace MediaTek in becoming the second largest client to TSMC in 6nm and 7nm process nodes.
According to industry insiders, TSMC will be manufacturing Apple’s A15 processor, M1X, and M2 computer processors using the 5nm process node. And TSMC is also making chips for MediaTek, AMD, and Intel adopting the 7mn and 6nm process nodes pushing strong growth momentum for the second half of 2021. TSMC will likely reach the goal to grow by 20% this year, and reach another peak for the coming year as well.
In the third quarter, Qualcomm will outsource a large portion of its 6nm process node to TSMC.
Three of Qualcomm’s 5G chipset models will expand in 7nm and 6nm process nodes made by TSMC.
By the second half of 2021, Qualcomm’s shipments of 5G smartphone chipset made with the 6nm process node will exceed 60 million units and consequently making Qualcomm TSMC’s second largest client, second to AMD and pushing MediaTek down to the third.
Qualcomm chipsets will be manufactured by both Samsung and TSMC in 2022 for 4nm and 5nm process nodes, adopting a different strategy from outsourcing all productions to Samsung as before.