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Samsung to produce chips for Nvidia, Qualcomm – analyst

Samsung Electronics is expected to significantly improve its contract semiconductor manufacturing business this year thanks to early start of production using 14nm FinFET fabrication process. While Apple, the largest customer of Samsung, now orders chips not only to Samsung, but to TSMC as well, it continues to work with the conglomerate. Moreover, due to concerns about capacities, a number of customers now plan to make chips at both TSMC and Samsung.

Nvidia Corp., a long-time customer of Taiwan Semiconductor Manufacturing Co., as well as Qualcomm and some other fabless semiconductor developers, plan to order chip manufacturing to Samsung Electronics this year. Many chip designers are concerned about yields of ICs that will be made using 14nm FinFET and 16nm FinFET manufacturing technologies. In addition, they are concerned about availability of manufacturing capacities. As a result, fabless companies plan to diversify FinFET chip suppliers, something that is expected to bring a lot of benefits to Samsung and GlobalFoundries.

“Global AP makers are likely to focus on lowering the cost of production this year in order to offset a decline in AP prices,” said Park Yu-ak, an analyst at Meritz Securities, in an interview with BusinessKorea. “Samsung’s system semiconductor business is going to mass produce and supply chips to Apple, Qualcomm, and Nvidia starting in the second quarter of this year. As a result, the Korean tech giant is projected to exhibit stellar performance.”

It is not completely clear which chips from Nvidia will be made by Samsung, but it is an alarming news that a loyal TSMC customer wants Samsung to produce a product or two.

samsung_semiconductor_foundry_chip_production_4

Recently Nvidia introduced its Tegra X1 system-on-chip that will be made using 20nm fabrication process at TSMC.

Since Nvidia’s next-generation graphics processing units that are based on the code-named “Pascal” architecture are due only in 2016, it is unlikely that Samsung will start production of Nvidia’s new GPUs in the second quarter of 2015. It is possible that the company will shrink certain versions of its current-generation graphics chips to 14nm FinFET process to cut their power consumption, decrease manufacturing cost and/or improve performance. However, it is more likely that Samsung will make certain new Tegra application processors for Nvidia.

Nvidia, Samsung, Qualcomm and TSMC did not comment on the news-story.

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KitGuru Says: If the information is correct, then this will be the first time in more than ten years when Nvidia uses a foundry other than TSMC.

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