Report: Qualcomm Says Samsung, Not TSM, Will Be The Sole Manufacturer Of Its Flagship Mobile Chip

According to Reuters, QUALCOMM, Inc. (NASDAQ: QCOM) named SAMSUNG ELECTRONIC (OTC: SSNLF) the exclusive maker of its new flagship mobile chip, the Snapdragon 820.

Reuters noted that Qualcomm awarded the deal to Samsung over rivals such as Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE: TSM). The report added that the contract could be worth over $1 billion and is a "blow" to Taiwan Semiconductor who historically counted Qualcomm as its top customer.

Maybank Kim Eng analyst Warren Lau told Reuters the contract is "significant" because "never before has Qualcomm used foundries other than TSMC to make high-end chipsets." The analyst also suggested that Qualcomm could increase orders to Samsung for other Snapdrop chips that would be launched later on this year.

Lau also suggested that Samsung could become a key client to Qualcomm once it begins mass production on the 10-nanometre technology. In addition, Qualcomm's orders could result in additional customers shifting away from Taiwan Semiconductor towards Samsung.