After Snapdragon S4 fiasco, Qualcomm mulls own wafer fab. Or Apple-like big checks to suppliers

Qualcomm is reportedly getting sick of TSMC’s issues with the 28 nm process used to make its Snapragon S4 systems-on-a-chip (SOCs) – and the shipping delays that these have caused so far. This lack of supply has, in fact, affected its earnings for the second quarter, and will further take its toll on the numbers for Q3.

So, understandably, the company is thinking about doing something to prevent such situations from ever occurring again. Although Qualcomm is one of the world’s biggest chip designers, it’s also the world’s biggest fabless chip maker – which means that it doesn’t have its own factories to make those chips in. Instead, it relies on partners such as TSMC (Taiwan Semiconductor Manufacturing Co.), which actually churn out the silicon.

But now Qualcomm is seriously considering owning a wafer fab in the future. Another option would be to put large amounts of cash down upfront to ensure its supply of semiconductors, much like Apple is doing with its suppliers.

Paul Jacobs, the CEO of Qualcomm, has been quoted as saying that his company would prefer to remain fabless, but if it was advantageous to own the means of production in the future, Qualcomm would not shy away from that.

Qualcomm’s Snapdragon S4 SoC is undoubtedly one of the most popular with phone makers these days. And because of its built-in support for 4G LTE connectivity, it’s proven very popular with carriers over there. In fact, all of the recently launched high-end Android smartphones in the US use this chipset.

However, in April it first emerged that Qualcomm is facing supply shortages for the S4 chips. TSMC has been having issues with its 28 nm process, which is what is used for the S4. So that hits Qualcomm pretty hard. And its mobile device-making partners as well. For example, Asus has had to delay the Padfone because of this chip shortage.

Since April Jacobs has apparently visited Samsung in order to discuss the possibility of the Korean company making chips for Qualcomm. However, the fact that the two companies are essentially competitors in this space may have hampered the talks a bit. It may be for the same reason that a deal with Intel for the same purpose, while rumored, hasn’t been made so far.

The good news is that the supply constraints for the 28 nm chips such as the Snapdragon S4 are easing right now, but production levels still aren’t where they should be. So some additional smartphone delays can be expected.

Via EE Times

Author: Vlad Bobleanta

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