In 2024, Samsung Foundry encountered significant challenges with its 3 nm chip production due to poor yield rates, leading to the decision to abandon Exynos for the Galaxy S25 series. Amidst this, Samsung had been exploring outsourcing Exynos production to TSMC, but this plan was thwarted when TSMC declined the offer.
The rejection by TSMC, notably reported by the insider Jukanlosreve, could be attributed to the desire to guard proprietary manufacturing processes from a competitor like Samsung.
This decision comes at a time when Samsung has been attempting to stabilize its 3 nm process, which it recently announced had been achieved, although too late for the Galaxy S25 lineup.
The immediate impact is that all three models of the Galaxy S25 will feature the Snapdragon 8 Elite chipset. If Samsung continues this trajectory with the next generation, using the Snapdragon 8 Elite Gen 2, it faces the challenge of potentially higher costs due to Qualcomm’s planned price increase, which could reflect in higher phone prices. This shift might affect Samsung’s competitive pricing strategy and profitability in the smartphone market.
Samsung remains committed to its in-house Exynos technology, with plans to introduce the Exynos 2500 in upcoming Z series phones. Despite this setback, Samsung is pushing forward with its semiconductor roadmap, targeting 2 nm and even 1.4 nm processes.
As Samsung navigates this semiconductor production dilemma, the focus will be on how it manages to innovate with its Exynos lineup to maintain its standing in the fiercely competitive smartphone industry. The rejection by TSMC might be a setback, but it also underscores Samsung’s resolve to perfect its in-house solutions.
