Samsung Electronics and Qualcomm’s negotiations over a 2-nanometer foundry deal look set to extend into next year.
According to semiconductor industry sources on the 28th, the two companies are continuing talks on a contract to have Samsung manufacture Qualcomm’s next-generation application processor (AP) using its 2-nanometer process. However, they have been unable to resolve differences over details such as pricing.
An AP is the “brain” chip that handles a smartphone’s computing and communications, while a foundry business manufactures chips designed by other companies.
The negotiations came to light at CES 2026 in January. Qualcomm CEO Cristiano Amon said at the time that the company was in talks with Samsung Electronics on a 2-nanometer process and had completed design work for commercialization.
When Amon visited Korea in April and met with Han Jin-man, head of Samsung Electronics’ Foundry Business, industry observers speculated that a deal was imminent. Five more months have passed since then.
Technology has cleared the hurdle; price has not
Based on accounts from industry insiders, technology is not the obstacle. In the past, Qualcomm’s efforts to secure production capacity from Samsung repeatedly fell through because Samsung’s process could not meet the required performance and yield levels.
The 2-nanometer process now under discussion has largely stabilized, and Qualcomm is said to have evaluated it positively. Samsung’s own Exynos 2600 AP, which uses the same process, has also received solid reviews for its performance.
Qualcomm is seeking a low manufacturing cost, while Samsung Electronics is not willing to meet that demand. One semiconductor industry source said the negotiations had been going on for quite some time, but that the parties ultimately remained apart on terms such as price. The source added that Samsung Foundry’s recent order intake has been strong, including substantial demand for HBM4 base dies, so it is not in a position where it needs to accept unreasonable demands just to secure a contract. The relatively small volume under discussion is also seen as a reason Samsung is not lowering its price.
This is no longer a case of filling idle factories
Foundry operations require large fixed costs because factories must be built and kept running. When orders are scarce, taking on work at lower prices to keep factories busy can help reduce losses. For a long time, Samsung Foundry was in that position.
Things have changed this year. Samsung Electronics signed a $16.5 billion contract to manufacture chips for Tesla, then went on to secure orders for AI and high-performance computing products from major technology companies, including Broadcom.
In April, Samsung said it was discussing 2-nanometer orders with several major technology companies and expected additional contracts. It has also raised prices. In July, it increased prices for new 4-nanometer orders, and prices for 5- and 8-nanometer processes are also reported to have gone up. Increases for some advanced processes reached 10% to 15%.
Foundry demand is also coming from the memory business. In February, Samsung Electronics became the first in the industry to begin mass production and shipments of HBM4, and it has started supplying the memory for Nvidia’s next-generation Vera Rubin platform.
HBM is memory made by stacking multiple layers of DRAM. The base die at the bottom is manufactured using a foundry process.
Taiwan’s DigiTimes reported that Samsung has allocated more than half of its 4-nanometer capacity to HBM4 base dies, and reports have also emerged that the company is considering expanding its 4-nanometer capacity. Another industry source said 4-nanometer capacity is tight just to meet HBM4 demand, adding that as foundry profitability has improved, Samsung has less need to accept low-priced orders simply to fill capacity.
When production capacity is limited, priority goes to customers and products with higher profitability. Samsung has less reason than before to make steep price concessions just to win Qualcomm’s business.
Production this year has become unlikely
Time is not on Qualcomm’s side. APs must enter mass production in time for smartphone launch schedules. TheBell reported on the 9th that, with the contract delayed, Samsung’s production of Qualcomm APs this year appeared unlikely, and that the companies had also discussed resuming talks over a next-generation product.
Since 2021, Qualcomm has moved production of its major APs to TSMC. With demand for AI chips also surging, TSMC has been aggressively raising prices for its most advanced processes, leaving Qualcomm in need of an alternative such as Samsung.
Qualcomm held its annual Snapdragon Summit in Maui, Hawaii, on the 22nd. No deal with Samsung was announced there either. Neither Samsung Electronics nor Qualcomm has issued an official statement on the negotiations.
Samsung Electronics has also divided responsibilities as it works to restore its foundry business. Han Jin-man, head of the Foundry Business, is responsible for rebuilding customer trust and expanding orders, while Chief Technology Officer Nam Seok-woo is in charge of strengthening the competitiveness of its process technology.