Talks highlight shifting dynamics in advanced chip manufacturing as costs rise and yield gaps persist
Qualcomm is in discussions with Samsung Electronics over manufacturing next-generation application processor (AP) chips using a two-nanometre (2nm) process, a move that could help the U.S. chipmaker diversify its foundry supply chain. According to the Korea Economic Daily, the talks center on Samsung’s SF2 process, which the company plans to deploy first for mobile chips before extending it to high-performance computing workloads from 2026.
Qualcomm CEO Cristiano Amon was quoted as saying that discussions are ongoing with Samsung and other foundry partners, with design work already completed ahead of commercialization. While Qualcomm declined to comment further, Samsung said it does not comment on specific customers.
Why Qualcomm is considering Samsung again
Industry observers see the talks as part of Qualcomm’s broader effort to reduce reliance on a single manufacturing partner. In recent years, Qualcomm has depended heavily on TSMC for advanced chips, but rising wafer prices and tight capacity at leading-edge nodes have prompted large chip designers to look for alternatives.
If finalized, the deal would mark Qualcomm’s return to Samsung Foundry for advanced chip production for the first time since 2022. Qualcomm previously shifted most of its leading-edge orders to TSMC after encountering yield and thermal performance issues at Samsung.
Yield performance remains a central issue
A key factor shaping Qualcomm’s decision is yield. Samsung’s SF2 process is currently reported to deliver yields of around 50 to 60 percent per wafer, compared with roughly 80 percent for TSMC’s N2 node. This difference is significant for a company like Qualcomm, which needs consistent output across a broad product range, particularly for flagship mobile processors.
Analysts say this gap could limit Samsung’s role to partial or secondary production in the near term, rather than full-scale volume manufacturing. It may also give Qualcomm additional leverage when negotiating pricing and capacity with TSMC.
Cost pressures and pricing dynamics
Pricing is another variable. TSMC is widely expected to raise wafer prices for its N2 process by 10 to 20 percent, reflecting higher manufacturing complexity and strong demand. This could open a window for Samsung to compete on cost, even if its process remains less mature.
However, lower pricing alone may not be enough. Industry sources note that Qualcomm prioritizes long-term supply stability and predictable performance, meaning Samsung would need to demonstrate sustained improvements in yield and thermal characteristics before securing large orders.
Samsung’s push to rebuild its foundry business
The talks come as Samsung intensifies efforts to revive its loss-making foundry division. In July last year, the company signed a US$16.5 billion agreement to manufacture next-generation AI chips for Tesla, a deal widely seen as a vote of confidence in Samsung’s advanced manufacturing roadmap.
Samsung has also been investing in its broader manufacturing ecosystem. It has certified Siemens EDA tools across process nodes from 14nm to SF2 and SF2P, and partnered with Synopsys on 2.5D and 3D chip packaging technologies aimed at supporting chiplet-based designs for AI and high-performance computing from 2026.
What a deal would signal
Samsung Head of the chip division & Co-CEO Jun Young-hyun said recently that new supply agreements with major customers have left the foundry business “primed for a great leap forward.” A Qualcomm contract, even at limited volumes, would reinforce that narrative and help validate Samsung’s 2nm technology.
For Qualcomm, the talks underscore a pragmatic approach rather than a wholesale shift away from TSMC. Industry analysts say the company is likely to keep TSMC as its primary partner while testing Samsung’s 2nm process as a secondary option—balancing cost, capacity, and risk as competition at the cutting edge of chip manufacturing intensifies.
