Samsung’s Top 5 Customers: Qualcomm Ousted After 3 Years

For a long time, Qualcomm has been one of Samsung’s top five revenue sources. However, in recent years, Qualcomm has transferred a significant number of orders to TSMC, gradually phasing out Samsung as a primary client. This shift has caused some anxiety for Samsung and is one of the main reasons it is eager to commence mass production of its second-generation 3nm GAA process, hoping to bring Qualcomm back to the negotiating table.

According to Business Korea, a recent report from Samsung reveals that its top five customers are Apple, Deutsche Telekom, Hong Kong’s Techtronic Industries, Japan’s Murata Manufacturing, and Verizon, collectively accounting for approximately 13% of Samsung’s total revenue. This marks the first time in three years that Qualcomm has fallen out of the top five.

Samsung's 3nm process yield rates

Previously, Qualcomm outsourced a significant portion of its Snapdragon series chips to Samsung for production. However, much of this business has now been taken over by TSMC. Nevertheless, with the recent surge in Chinese smartphone sales, some companies from mainland China and Taiwan have filled the void left by Qualcomm, increasing their procurement from Samsung. In the past two years, Samsung had several opportunities to secure large orders from Qualcomm but ultimately missed out, with TSMC appearing to have the upper hand.

Last year, reports indicated that Qualcomm, concerned about TSMC’s limited capacity, planned to implement a dual-foundry strategy in 2024. The fourth-generation Snapdragon 8 would use TSMC’s N3E process, while the version supplied for Galaxy series smartphones would adopt Samsung’s 3GAP (SF3) process. However, due to Samsung’s conservative approach to 3nm capacity expansion and unstable yield rates, Qualcomm decided to postpone this plan.

Rumors suggest that Qualcomm still intends to adopt a dual-foundry strategy in 2025 and has requested 2nm chip samples from both TSMC and Samsung for further evaluation. Qualcomm aims to reduce SoC production costs with this new strategy, and it remains to be seen whether Samsung can seize this opportunity.