The cost of next-gen mobile chips forces a major manufacturer to give up on 7nm production

The cost of next-gen mobile chips forces a major manufacturer to give up on 7nm production
Computer chips are getting smaller and more powerful and in a couple of months we’ll see the first smartphones (the new iPhones) using processors based on the 7nm architecture (current smallest is 10nm). The companies that are capable of mass producing those are very few and the exclusive club just lost one of its members.

GlobalFoundries, one of the leading semiconductor manufacturers, announced that it is discontinuing its 7nm development program as part of a new business strategy. The move comes as a bit of a surprise, after the company has worked on its 7nm fabrication process for almost two years and was expected to start mass production later this year.

GlobalFoundries also canceled the development of the 5nm and 3nm processes and will instead focus on production of 14 and 12nm chips. These types of chips are largely used in mid-range phones and are in high demand from phone makers that look to conquer emerging markets.

Development and production of the facilities needed to produce smaller chips cost billions of dollars and the investment is only worth it for companies if they will have enough orders to make up for it. Since the only two other manufacturers with 7nm lines, Samsung and TSMC, were already ahead of the race and shipping chips to their clients, GlobalFoundries decided it makes no sense to keep funneling money into R&D that might not pay off.

The reduced competition is good news for Samsung and TSMC, but manufacturers that have high-end models might see an increase in chip prices, if they want their orders to be completed with priority. This means that future flagship phones might be even more expensive than what we’re already seeing.

This move from GlobalFoundries highlights the challenges companies face on the forefront of technology, now that significant performance gains are harder and harder to achieve. No wonder companies are trying to look for other ways to grab consumers' attention, like coming up with foldable phones.

source: AnandTech

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14 Comments

1. STRANG3R

Posts: 234; Member since: Sep 24, 2015

This global company manufactures for which company socs ?

3. Dr.Phil

Posts: 2488; Member since: Feb 14, 2011

I believe they primarily used to make AMD chipsets seeing as AMD used to own them, but now AMD is going with TSMC.

14. vincelongman

Posts: 5750; Member since: Feb 10, 2013

In terms of moblie SoCs, GlobalFoundries licensed Samsung's 14nm and actually made some of Qualcomm's 820, Samsung's Exynos 7420/8890 and other 14nm SoCshttps://www.globalfoundries.com/news-events/press-releases/samsung-and-globalfoundries-forge-strategic-collaboration-deliver-multi

5. worldpeace

Posts: 3135; Member since: Apr 15, 2016

AMD, Mediatek, Broadcom, and others..

2. ALMBO6

Posts: 196; Member since: May 28, 2018

So that means no need to wait for next year's Galaxy S10 that'll be too expensive anyway, better just buy a note9 or S9+ and hold on to it for as long as possible.

9. yalokiy

Posts: 1112; Member since: Aug 01, 2016

Won't be more expensive than note 9..

4. Dr.Phil

Posts: 2488; Member since: Feb 14, 2011

I think Intel makes their own chipsets too, PA. So technically there’s three foundries left.

6. worldpeace

Posts: 3135; Member since: Apr 15, 2016

Intel still stuck in 14nm+++, they'll start making 10nm late 2019 (not a typo). They better skip 7nm and straight to 5nm to catch up with others.

10. Walkermoon

Posts: 38; Member since: Aug 22, 2015

Actually Intel's 10nm process is as much, if not more, optimised as the 7nm process. Instead of scaling down the individual transistor size, they have decided to focus on the design and power efficiency.

12. vincelongman

Posts: 5750; Member since: Feb 10, 2013

2 left (TSMC and Samsung) Intel most likely wont ever fab for anyone else

7. tiara6918

Posts: 2263; Member since: Apr 26, 2012

Xiaomi is probably barely profiting or at a loss with the pocophone f1 with snapdragon 845. I'm pretty sure qualcomm charges a ton of money for their top of the line 800 series chipsets

8. Back_from_beyond

Posts: 1473; Member since: Sep 04, 2015

It's about establishing a loyal brand following and when you have that, start jackig up the prices to make profit. Huawei phones have also increased in prices significantly over the last few years and they're currently the #2 in the world sales wise.

11. mootu

Posts: 1541; Member since: Mar 16, 2017

Xiaomi has based their whole business model of not making more than 5% on each phone and relying on volume of sales, it's working so far and they are now the 4th largest phone OEM in the world and No.1 in growth.

13. vincelongman

Posts: 5750; Member since: Feb 10, 2013

Unfortunately its only going to get worse now that TSMC are the only fab with "7nm" ready

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