Samsung Electronics Co has decided to return to using Qualcomm Inc’s most powerful chips in its new high-end smartphones, a year after turning away from the US company’s products and triggering a slump in its earnings and stock price.
Samsung, the largest maker of smartphones, is planning to use Qualcomm’s Snapdragon 820 application processor chip in some versions of the next Galaxy S, people with direct knowledge of the matter said.
The South Korean company, which is scheduled to show off its latest models next month, is to continue to use its own processor in about half of that line, with phones for China and the US mostly using Snapdragon, the people said.
The decision to at least partially return to Qualcomm might help Samsung’s unit that manufactures chips for other companies. The two companies said this week that Samsung’s foundry business received orders from Qualcomm to make the 820 using advanced techniques that allow chips to draw less power and perform better.
The US company’s Snapdragon processors, combined with its cellular baseband chips, have dominated the market for smartphones and made it one of the largest beneficiaries of the explosion of mobile Internet use.
The San Diego-based Qualcomm needs more orders from Samsung, which accounts for almost a quarter of the smartphone market, to turn around sales that have slumped an average of 16 percent during the last two quarters.
The S7 phone is to have a 5.1-inch front screen, and the S7 Edge is to have a 5.5-inch screen stretching down the sides, one of the people said. Samsung plans to release the products for sale in March, another person said.
Representatives of both companies declined to comment about the plans.
Shares in Samsung pared earlier gains in Seoul and closed little changed at 1,132,000 won in Seoul, compared with the benchmark KOSPI’s 1.1 percent decline. Qualcomm shares gained 3.5 percent to US$47.73 in New York.
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