June 27, 2024 – Recent reports from South Korean media FNN indicate that Samsung Electronics is facing significant challenges with the production of its Exynos 2500 chip. Due to low yield rates that are currently below the requirements for mass production, the tech giant is exploring alternative options, including a potential collaboration with MediaTek to custom-design chips for its upcoming Galaxy S25 series of smartphones.
The Exynos 2500, Samsung’s next-generation flagship mobile processor, has been facing yield issues, with current rates hovering at just under 20%. This figure is significantly below the 60% threshold that Samsung typically aims for before commencing mass production of its SoC (System on a Chip) for mobile phones.
With a deadline set for the end of this year to achieve satisfactory yield rates, Samsung’s LSI division is under pressure to improve the production efficiency of its next-generation flagship chip.
As a contingency plan, Samsung is considering two primary options: equipping the entire Galaxy S25 series with Qualcomm’s Snapdragon 8 Gen 4 processor, or collaborating with MediaTek to create customized Dimensity chips for the Galaxy S25 and Galaxy S25+ devices.
According to industry insiders, the latter option appears more likely, largely due to the escalating costs of the Snapdragon 8 Gen 4 processor. Reports suggest that the price of the Qualcomm chip has surged by 25% compared to its predecessor, owing to the high demand and limited supply of TSMC’s 3nm technology.
The increased cost of the Snapdragon 8 Gen 4, which is expected to exceed $250, along with evidence suggesting that MediaTek’s chipset supply prices are lower than Qualcomm’s, makes the potential partnership with MediaTek a financially prudent move for Samsung.
Data from the first quarter of 2024 reveals that while MediaTek shipped the highest number of chipsets (approximately 114 million units), its profits were significantly lower than Qualcomm’s, despite the latter’s lower shipment volume. This disparity suggests that MediaTek could offer more cost-effective solutions to Samsung.
In light of the Exynos 2500’s yield issues and the escalating costs of Qualcomm’s flagship processor, Samsung’s potential partnership with MediaTek seems not only logical but also strategically beneficial, especially in a highly competitive and cost-conscious smartphone market.
