Qualcomm Was Dependant On Samsung For 40 Percent Of Its Chipset Revenue In Q4 2023, Which May Be Bad News Going Forward

Samsung is regarded as a major smartphone chipset customer for Qualcomm, which is likely why the latter recently renewed a multi-year agreement with the Korean giant to use its Snapdragon silicon. However, it can become worrisome if one company depends on just one client to bring in 40 percent of the total revenue for a specific quarter, but according to the data shared for Q4 2023, Qualcomm appears to be too dependent on Samsung in this regard. We have witnessed on previous occasions that things can go from bad to worse if companies cannot diversify.

The situation can become dire if Samsung can improve its Exynos chipsets to the point where it does not require Qualcomm’s SoCs any longer

Data published by Canalys shows that for Q4 2023, Samsung brought in 40 percent of Qualcomm’s Snapdragon chipset revenue. Xiaomi secured second place by accounting for 17 percent of the total revenue, but there is a major disparity between the two companies, and it needs to be addressed. In comparison, MediaTek has a more balanced outlook, with Samsung bringing in a quarter of its total smartphone chipset revenue, followed by Xiaomi at 17 percent.

This means that even if the Korean behemoth were to forego all of MediaTek’s chipset designs for this year, it would not affect the Taiwanese fabless semiconductor manufacturer as much as it would Qualcomm. Just recently, we reported that MediaTek has added nearly all Android phone makers to its portfolio, with the exception of Google, and it has around 15 chipset designs alone for the first quarter of 2024. For the time being, Samsung has little choice but to remain tethered to Qualcomm.

While its Exynos 2400 saw major improvements compared to the Exynos 2200, it continues to lag behind the Snapdragon 8 Gen 3, and the Snapdragon 8 Gen 4 might likely be a better option compared to the Exynos equivalent that Samsung intends to launch later this year. The Snapdragon 8 Gen 4 is also said to be more expensive than the Snapdragon 8 Gen 3, which would force Samsung to make compromises elsewhere in its Galaxy S25 series to make decent margins.

At the same time, Samsung can jumpstart its foundry business to match TSMC’s quality, thereby mass producing improved Exynos SoCs that match its Snapdragon rivals in both performance and power efficiency, but that may take a while. Only recently, it was reported that the Korean firm’s advanced 2nm process is just a renamed second-generation 3nm node, meaning they will not be true 2nm wafers.

Qualcomm is likely aware that there is too much riding on Samsung’s partnership, which is why it was previously said to have requested 2nm samples from both the latter and TSMC, as it may resort to a dual-sourcing strategy for the Snapdragon 8 Gen 5, reducing its manufacturing costs and encourage Samsung to resume taking orders. The San Diego chipset maker could have offset any losses with future orders from Huawei, but as the former Chinese giant has resorted to using its Kirin 9000S from hereon, an analyst estimates that Qualcomm could lose up to 60 million orders this year, resulting in a monetary loss that is in the billions.

Then again, Qualcomm probably knows that Samsung is dependent on its chipsets since its Exynos range will probably continue to struggle for a few years, so a 40 percent revenue share from a company may not be a terrible deal, assuming that Qualcomm can maintain this business relationship for years to come.

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