Samsung weighs retooling Galaxy S series with Exynos chipsets  

Samsung Electronics Co. is seeking to switch the application processors (APs) of some Galaxy S models to its Exynos chipsets next year to lower its reliance on Qualcomm Inc.’s Snapdragon chips due to growing AP purchasing costs.  

According to the company's half-year report on Tuesday, the South Korean smartphone giant spent 5.7 trillion won ($4.3 billion) in mobile AP purchases in the first six months of this year, accounting for the largest 17.7% share in its Mobile eXperience (MX) division’s entire raw material and part costs in the period.

An AP plays the role of the human brain in mobile information technology devices like smartphones. It is a system-on-chip (SOCs) with a central processing unit (CPU), a graphics processing unit (GPU), modem chips and other chips in one place together.

The company attributed a 30% on-year jump in AP prices in the first half of this year to its higher AP spending. The AP’s unit price climbed due to the growing demand for AI chips and a rise in foundry costs.

WEAKER BARGAINING POWER

Samsung MX division’s AP expense steadily increased to 11.4 trillion won in 2022 from 7.6 trillion won in 2021 but the rise accelerated this year after the Korean chip giant used Qualcomm’s chipsets in all models of its latest premium Galaxy S23 and foldable Z series after ditching its in-house Exynos chips.

Some industry observers noted that Samsung has lost its bargaining power as it entirely relies on the American chip maker’s chipsets for its premium phones.

The Korean smartphone major used both Qualcomm Snapdragon and its in-house Exynos chips in the predecessors of the Galaxy S23 series. The old Galaxy phones sold in Korea, the US and China were equipped with Snapdragon chips whereas consumers in Europe and South America used Exynos-based Galaxy phones.

Samsung Electronics could leverage its two-variant strategy during its price negotiations with Qualcomm.

When it launched its latest premium Galaxy smartphone series in February, Samsung Electronics, however, used Qualcomm’s next-generation Snapdragon 8 Gen 2 Mobile APs in the entire line of the Galaxy S23 and foldable Z series to avoid technical glitches with the Exynos chip.

Earlier Galaxy S model users complained about the poor performance of their phones fitted with Exynos chips, jointly designed by American chip fabless Advanced Micro Devices Inc. (AMD) and Samsung System LSI, Samsung Electronics’ chip designing arm. They were produced by Samsung Foundry.

Qualcomm said its latest processor chip’s graphics processing unit (GPU) can handle graphics 41% faster than previous models while allowing users to enjoy high-end games without interruption.

IMPROVEMENT IN EXYNOS PERFORMANCE

The growing cost burden has, however, led Samsung Electronics to seek to return to Exynos chips for the next Galaxy S24 series and release two variants using both the in-house and Qualcomm chips.

It is said to be considering Qualcomm’s Snapdragon chips in Galaxy S24 Plus and Ultra models and Exynos chips in the others.

Samsung System LSI and AMD are currently working together to improve the graphic performance of the Exynos chip, while Samsung Foundry has recently upped the production yield of the cutting-edge 4-nanometer process to 75%, near the same level of Taiwan Semiconductor Manufacturing Company Ltd. (TSMC).

Samsung Electronics said whether the MX division would use Exynos in its premium phone series depends on consumers’ demand and the performance of the Exynos chip.

The industry expects to find out the company’s decision about the use of the Exynos chip in its Galaxy S24 smartphone series at Samsung System LSI Tech Day 2023 due to be held in San Jose, California on Oct. 5.  

The last Exynos chip used in the Galaxy S series was the Exynos 2200 chip used in the Galaxy S22 series in 2022.

Write to Jeong-Soo Hwang at hjs@hankyung.com

Sookyung Seo edited this article.