San Jose-headquartered Xilinx Inc has been tapped to help Samsung roll out 5G network equipment. That's according to a statement reportedly released by the companies as recently as this week. The pair is unsurprisingly keeping underlying financial details well under wraps. But the deal does position Xilinx as a chief supplier of chips for Samsung's mobile networking efforts.
Xilinx will be providing Samsung with its 'Versal' chips. Those are programmable chips used in telecommunications base stations and typically joined with hardware built by Ericsson, Nokia, and Huawei — each a major player in the networking game in its own right. Specifically, in this case, the chips will be used to help Samsung provide beamforming in its 5G equipment.
Beamforming effectively manages the connections between networking equipment for efficiency, allowing more bandwidth and a better connection overall. That's going to be an important part of 5G build-outs from Samsung.
This could be a big move for Samsung in the 5G market and potentially for Xilinx
Now, Samsung is not the biggest name in mobile networking equipment in the US or globally. But it has been slowing expanding its business into that territory recently. In particular, the company is behind many of the build-outs in its home region of South Korea. This deal with Xilinx will ensure its supply of chipsets, enabling those implementations, is stable. So Samsung should be in a good position to continue progress on that front.
But this could be an equally big deal for Xilinx. While the company has been supplying chipsets for some time, in recent years, that business has been interrupted. Primarily, that's because of the US' decision to move Huawei to its Entity List and halt its ability to operate in the US. The list marks the company as a perceived threat to national security. Huawei has summarily dismissed claims as they've been put forward but authorities remain unconvinced.
Because of that decision, not only are various world companies being pressured to bring operations to the US. American companies such as Xilinx are unable to operate with Huawei. The Chinese tech giant is a global leader in networking equipment, especially 5G. So the ban has an especially detrimental impact on Xilinx since it has undoubtedly lost one of its biggest customers just as 5G rollouts are beginning to ramp up.
If Samsung can scale its 5G and networking business, the deal means that Xilinx may not face quite as large a setback as a result of that ban.
Samsung probably isn't leaving its home region with this anytime soon
Samsung's decision to accept a partnership with the US-based chip provider for its 5G networking equipment likely won't have an immediate impact outside of its home region. Not only will this have no impact on the smartphones the company is most well-known for. It's also unlikely that Samsung will become a major player in the wider global 5G market in the near future.
But the move could feasibly help the South Korean tech giant start to grow its 5G business in that direction.