In the processor world, the smaller the fabrication process, the lower the power consumption and the greater the unit cost for a given processor. The lower the power consumption, the lower the heat output and these two factors are of particular importance for mobile devices, where battery capacity and the ability to exhaust heat into the environment are limiting factors for modern devices. This is something all device designers have to cope with. However, the smaller the process size, the smaller the individual components in the chips and the more precise and delicate the manufacturing process. Earlier this year, Samsung introduced the Samsung Galaxy S6 family, which included the Exynos 7420 system-on-chip, built on a 14nm process size. The Exynos 7420 is still one of the best mobile system-on-chips available on the market today and powers a number of individual devices in the Samsung portfolio. However, whilst Samsung do not appear to be easily persuaded to let other manufacturers use their Exynos chipset (there are only a very few number of manufacturers other than Samsung using this chipset), they are more than keen to build processors for other businesses. Today’s story concerns Samsung offering to build system-on-chips for HiSilicon Technologies, the fabless chip designer and vendor wholly owned by Huawei and responsible for the Kirin chipset. Fabless means that HiSilicon Technologies does not own chip manufacturing plants and therefore designs the chipsets but has one or more subcontractors to build the units.
In isolation, this story should not be a surprise. Samsung introduced their 14nm process size chips with the Galaxy S6 and have presumably refined and improved their chipmaking abilities over the year to date. Samsung are already believed to be working with Apple and Qualcomm to build their next generation chipsets but have been discussing the potential for more orders with existing TSMC (Taiwan Semiconductor Manufacturing Company) customers. HiSilicon Technologies have already engaged with TSMC to build system-on-chips at the 16nm size in their Taiwan foundry. It is not clear if this decision will be reversed, if the Samsung-made 14nm chips will supersede or compliment the TSMC 16nm chips.
Samsung’s manufacturing process (and price cuts to encourage chip designers to use their foundries) should help the business gain market share against their competitors, which will make up for the losses in market share a couple of years ago. Furthermore, the jostling between the chip foundries and the differences in technology at the manufacturing side of things should keep the business competitive and keep prices down, which ultimately should be good news for the end customer.