US chip maker Qualcomm Inc plans to have its next-generation Snapdragon 820 mobile processors manufactured by Samsung Electronics Co Ltd, tech news website Re/code reported, citing unnamed sources.
The move comes after Samsung opted to use its own Exynos processors for the recently launched flagship Galaxy S6 devices instead of the Qualcomm Snapdragon 810, prompting the U.S. firm to cut is financial outlook for the year.
Samsung and Qualcomm declined to comment on Re/code's report. The report, dated April 20, did not say whether Qualcomm was looking at other manufacturers for the 820 processor besides Samsung.
The report suggests gathering momentum for Samsung's system chips business, which investors and analysts expect will swing to profit this year. That could be negative for Taiwan Semiconductor Manufacturing Co (TSMC), which analysts say has gotten the bulk of Qualcomm's orders for high-end chips.
Samsung's 14-nanometer manufacturing technology gives the firm an edge over rivals such as TSMC, as smaller chips are more energy-efficient and deliver better performance. Investors and analysts say the superior technology will lead to more outside orders for Samsung's contract manufacturing business and further boost earnings.
Media reports say Samsung will make processors for Apple Inc's new iPhones expected to launch later this year, and the firm also recently added Nvidia Corp as a contract manufacturing client.