Samsung Electronics is reportedly mulling developing a new application processor series exclusively for its flagship smartphones, while having its existing Exynos chip series power midrange and entry-level phone models for other brands, according to industry sources. The Exynos series would compete against mobile APs from MediaTek and Qualcomm.
In the past few years, the Exynos series has relied Samsung's mobile phones to maintain shipment volume. Production and design issues in 2022 will further reduce Exynos shipments, the sources said.
The non-Apple mobile AP market is dominated by MediaTek and Qualcomm, and Samsung is seeking to expand its presence in the mobile AP market.
MediaTek and Qualcomm have maintained optimistic outlooks for their mobile phone businesses despite a weak mobile phone market in 2022 owing to their rising shipments to Samsung. Due to the poor shipment of the Exynos, the proportion of Qualcomm's Snapdragon 8 Gen 1 in the Galaxy S22 series has increased to 75%, the sources said.
For MediaTek, not only has it had more opportunities to introduce its product into midrange and entry-level Samsung phone models, the Dimensity 9000 series will have even more opportunities to take on other midrange, high-end, and light flagship models.
In terms of weak shipments of Chinese mobile phones in 2022, Samsung's AP adoption strategy has a critical impact on the market share of MediaTek and Qualcomm.
If Samsung does in fact launch a new flagship AP in 2025, as reported by Korean media, the use of Qualcomm's AP in the Galaxy S series will fall. The expansion of the Exynos brand will also put pressure on MediaTek's efforts to get into Samsung's midrange and entry-level mobile phones since there are cost advantages to using in-house products. This could result in MediaTek returning to its supporting role in entry-level phone models.
Ultimately, the key lies in the actual performance of Samsung's LSI and wafer foundry divisions. If the design and production issues of 2022 continue, resulting in poor product performance, low production yield will result in shipment volume being unable to fulfill actual mobile phone shipment demand. If this were to happen, it would be very difficult for Samsung to disrupt the dominant market positions of MediaTek and Qualcomm. Additionally, Apple would likely further erode Samsung's market share in the flagship model market.
Sources familiar with the AP market pointed out that since facing difficulties with the Exynos 2200, Samsung has realized that making AP technology breakthroughs is becoming increasingly more difficult and market competition is getting tougher. In terms of design, considerations regarding architecture and platform openness must be made in order to take the next step to make real progress.
Ever-increasing technical and experience thresholds are what is driving mobile phone brands to launch their own AP chips. However, other than Apple, no other company has yet to succeed, and Samsung has hit a few snags.
