[NEWS ANALYSIS] Samsung plans Exynos revival with Galaxy S24 launch

Samsung's Exynos 220 mobile chipset deployed in the Galaxy S22 series [SAMSUNG ELECTRONICS]

Samsung Electronics' once disgraced Exynos processor is vying for a resurrection with the flagship Galaxy S24 series slated for launch next year.

The comeback could provide major momentum for an array of Samsung's core businesses including smartphones, chip designing and chip manufacturing, all of which are in dire need of a breakthrough amid cutthroat competition from rivals like TSMC and Apple.

Samsung Electronics is set to bring back its Exynos chipset — the Exynos 2400 — in the Galaxy S24 series, according to multiple media outlets and tipsters. The European Galaxy S24, for example, will be “100 percent” powered by the Exynos 2400 chipset, according to tipster Ice Universe.

Samsung has yet to confirm the news, saying the detailed chipset strategy will only be available when the Galaxy S24 series launch is imminent, some time around February next year.

Some other markets such as the U.S., China and Japan will most likely use Qualcomm’s Snapdragon 8 Gen 3.

Samsung's mobile business head Roh Tae-moon has been persistent about “offering the best customer experience” when it comes to its chip strategy.

Some leaked benchmark tests show that the Exynos chipset has gotten a major boost in select functions such as its GPU performance, although there's still much catching up to do.

The average scores for the Exynos 2400 for its single- and multi-core tests were 1,530 and 6,210 on Geekbench, compared to 1,578 and 5,081 for Qualcomm's Snapdragon 8 Gen 2 for Galaxy S23.

Samsung Electronics mobile business head Roh Tae-moon introduces the Galaxy S22 series in 2022 [YONHAP]

Cost reduction

Samsung used to opt for a two-track strategy for its Galaxy S series, deploying both its in-house and Qualcomm-designed chipsets in order to gain an upper hand in price negotiations.

But when the Exynos 2200 chip deployed in Galaxy S22 got busted in 2022 because of overheating — which Samsung tried to resolve with a pre-installed game optimizing service (GOS) app that throttled the phone's other functions — the in-house chipset was instantly thrown out the window.

The next series, the Galaxy S23, as a result, was entirely powered by Qualcomm's Snapdragon 8 Gen chipset manufactured by TSMC's 4-nanometer technology.

The shifted chip strategy was proved successful by the sales figures with S23 shipping out 18.6 million units during the first six months, which was 23 percent more than the S22's 15.1 million units during the same period a year ago.

But there is one problem with outsourcing all the mobile chipsets to Qualcomm: price.

A complete reliance on Qualcomm chips lead Samsung to spend 5.75 trillion won in mobile application processor (AP) purchases in the first half of this year, according to the company's semiannual report.

That is 30 percent more than the previous year's 4.5 trillion won in the first half.

“Reducing cost is crucial for smartphone makers especially when the market is faced with sluggish growth and you have to leave a large margin per smartphone,” says researcher Kim Sun-woo from Meritz Securities.

“Especially for Samsung, which has the capacity to design and manufacture chips, outsourcing that to Qualcomm and TSMC would have felt like bleeding out. The Exynos deployment will be able to bring down the cost in major ways but that won't lead to an ultimate price drop in the handsets.”

AP is known to take up approximately 20 percent of the smartphone manufacturing cost.

Qualcomm's Snapdragon 8 Gen 2 mobile chipset deployed in Samsung's Galaxy S23 series [QUALCOMM]

Closing in on TSMC

The Exynos 2400 offers a chance for Samsung to close the gap with TSMC, the industry's dominant player that handles most of Apple and Qualcomm's chips.

TSMC's dominance is on the verge of being jeopardized with the latest A17 chip in Apple's new iPhone 15 series currently mired in an overheating issue. The culprit is being pointed to as TSMC, which manufactured the A17 chip using its 3-nanometer technology. It was the first time a 3-nanometer node was used for mobile chips but apparently the technology was immature.

If the overheating issue doesn't get resolved hastily, TSMC's major client Qualcomm and other chip designers looking for a chip fabricating partner could move on to Samsung Electronics.

“Diversifying the supply chain is almost always a beneficial strategy for a chip designer to negotiate the price and have a backup plan in case something happens,” says Professor Lee Jong-hwan of system semiconductor engineering at Sangmyung University. “It is certainly a chance for Samsung Electronics to boost its foundry [contract chip manufacturing] business.”

Qualcomm is said to produce its Snapdragon 8 Gen 3 chipsets with TSMC on its 4-nanometer nodes. The Gen 4 version, however, which is expected to be manufactured on 3-nanometer nodes and slated for launch next year, remains to be seen.

Samsung Electronics' yield for the 3-nanometer chip is approximately 60 percent, according to Park Sang-wook, analyst from Hi Investment & Securities. TSMC's 3-nanometer process yield is known to be between 55 and 70 percent.

“Samsung deployed what's called the GAAFET technology on its 3-nanometer process earlier than rivals. This could lead Samsung to secure more new clients in this advanced manufacturing area,” Park said in the report.