Qualcomm has decided to continue adopting Samsung's 10nm process for fabricating its newly released Snapdragon 845 chipset for smartphones, instead of advancing to 7nm process node. MediaTek has also decided to rely on the 12/16nm nodes of Taiwan Semiconductor Manufacturing Company (TSMC) to manufacture its Helio P series in the first half of 2018. Industry sources have speculated that the major smartphone chip vendors are reluctant to go for more advanced processes that may offer not much extra competitiveness.
The sources said the main advantage of smartphones chips fabricated on 7nm node comes from low power consumption, with little difference in performance and miniaturization compared to 10nm chips. Accordingly, most leading smartphone chip suppliers would rather wait to see what enhanced competitiveness could be achieved by TSMC's new 7+nm process, lest they should waste money on adopting the existing 7nm node.
Some industry watchers said Qualcomm's decision to stay with Samsung's 10nm node instead of turning to TSMC's 7nm is probably associated with strong retention efforts by Samsung and limited benefits from TSMC's existing 7nm technology.
But some others said that the growth momentum of global demand for smartphones has slowed significantly, driving down chip prices, and forcing chip suppliers to seriously weigh in on the cost for every new smartphone chipset. They added that higher wafer foundry costs would undermine their already declining gross margins.
Apple and Samsung are expected to be the only two smartphone vendors and chip developers who will remain keen to use 7nm processes for making their chips in 2018, and Huawei can hardly catch up in the short term due to cost concerns, industry sources said.
The sources estimated that for a smartphone chipset maker, annual shipments of 120-150 million chips fabricated on 7nm process are required to secure a break-even against the development cost, and only Apple, Samsung, Qualcomm and MediaTek can achieve that.
