Samsung Snubs Qualcomm, Builds 4G Chips
Samsung Electronics is making its own WiMAX and LTE baseband chips for wireless handsets, according to an article in EETimes. The move by the Korean electronics maker shows how much opportunity it sees as the wireless industry transitions to 4G …
Context & Ripple Effects
In late 2008, as the wireless industry prepared for the shift to 4G, Samsung Electronics decided to design its own WiMAX and LTE baseband chips rather than buy from Qualcomm, its longtime supplier — a bet that the modem, the heart of any handset, was worth owning in-house. The move foreshadowed a decade of escalating vertical integration: by 2015 Samsung reportedly dropped Qualcomm's Snapdragon 810 for its next Galaxy flagship [[a:825597]], shipped the Galaxy Note 4 LTE-A with its own Exynos silicon [[a:825058]], and then flipped the relationship entirely when Samsung struck a deal to manufacture Qualcomm's Snapdragon 820 in its own fabs.
First-order effects
- Qualcomm loses — or risks losing — baseband socket share in Samsung handsets at exactly the moment 4G (WiMAX/LTE) creates demand for a new generation of modems, threatening its core licensing-and-chips business model.
- Samsung gains control over its 4G roadmap, letting it tune radios and timing to its own handset launches instead of a supplier's schedule.
Second-order effects
- Qualcomm is pushed into a defensive posture that eventually turns collaborative-competitive: years later it moves Snapdragon production to Samsung's foundries [[a:828490]] even as Samsung keeps shipping its own Exynos chips in flagships.
- Other handset makers read Samsung's playbook, accelerating the industry-wide habit of dual-sourcing or in-housing modems and application processors to avoid single-supplier dependence.
Third-order effects
- The customer-supplier line in mobile silicon permanently blurs: the same company can be a rival chip designer, a contract manufacturer, and a legal adversary — a dynamic that culminates in Samsung backing the FTC's antitrust action against Qualcomm [[a:918904]].
- If the pattern holds, scale handset OEMs treat in-house baseband/modem design as table stakes for each generational transition (4G, then beyond), squeezing standalone merchant suppliers toward licensing models or consolidation.
The trend: Every wireless generation shift tempts the largest handset makers to internalize modem silicon, steadily converting Qualcomm's customers into competitors and contract partners at once.