Samsung's Growing Chip Ambitions Threaten Qualcomm

Samsung's ambitions in the semiconductor industry have been growing at a steady pace in recent times, with the company recently announcing its intentions to start offering its Exynos-series silicon to third-party original equipment manufacturers. The move represents a major threat to Qualcomm, with numerous industry analysts now speculating about the long-term implications of a more defiant Samsung. The South Korean OEM has been relying on Qualcomm's chips for years, having mostly produced its proprietary silicon for the international variants of its high-end devices, though many of its mid-rangers and entry-level offerings are now also shipping with such hardware, even those sold in the United States.

Samsung previously claimed an unfair patent licensing deal from 1993 saw Qualcomm lock it out of the global chip market as it required extra fees for Exynos chips used in non-Samsung devices, thus making them more expensive and non-competitive. Samsung's third-party chip push appears to be starting with ZTE that recently got banned from purchasing hardware from Qualcomm and any other American company over violations of U.S. trade sanctions imposed on Iran and North Korea, i.e. its inability to comply with the terms of a settlement meant to put an end to those issues in 2017. A supply agreement with ZTE would be a safer bet for Samsung than a partnership with an American OEM seeing how China's regulators are less likely to cooperate with the San Diego-based chipmaker even if it tries suing for extra royalties based on a contested 1993 licensing agreement.

Outside of Samsung's growing chip ambitions, Qualcomm is presently also having issues with its proposed acquisition of Dutch NXP Semiconductors which has yet to be approved by Beijing's antitrust watchdog. While China recently signaled the deal may eventually be greenlit, the uncertainty surrounding it continues to worry investors, especially now that the affair dragged on for so long that Qualcomm is contractually obliged to repurchase $4 billion worth of debt meant to finance the tie-up in the first place. Between Samsung's aspirations in the chip industry and the fact that both Huawei and Apple have been phasing out its technologies from their products in recent times, Qualcomm is presently facing a threat of being ditched by all three of the world's largest smartphone vendors.

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Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]
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