After many reports that Samsung is not happy with the thermal performance of the Snapdragon 810, Qualcomm seemed willing to update the chip specifically for Samsung. That updated chip, even if completely fixed, may not even arrive on time for the Galaxy S6, though.
However, there's an even bigger problem for Qualcomm. Even a fixed 20nm Snadragon 810 may not be enough to compete against Samsung's upcoming 14nm FinFET Exynos 7 Octa (7420).
According to a new report from Korea, Samsung's Exynos 7420 can have its Cortex A57 cores clocked at 2.1 GHz, while the optimal clock speed for the 20nm Snapdragon 810, which also uses Cortex A57 cores, is only 1.6 GHz.
Samsung may be trying to get the Snapdragon 810 as close as possible in frequency to its Exynos 7420 in order to have more performance equality between its U.S. model and its international model. The problem there is that Snapdragon 810 is not a 14nm FinFET chip, so it may not be able to handle such high frequencies. Samsung needs to make them closer in performance, otherwise its American customers may revolt against the company for putting a significantly lower-performance chip in their version of the Galaxy S6.
Samsung made such concessions before with the Galaxy Note 4 when it made its Exynos 5433 work only in 32-bit mode, to give it a similar performance profile to that of the Snapdragon 805. This time, the company may not be willing to do the same. The difference may be too big, and it wouldn't benefit anyone except Qualcomm to downgrade its own Exynos chip to match the performance of the lower-clocked Snapdragon 810.
Qualcomm still retains a significant advantage in the application processor market with the integration of modems into its SoCs. Samsung can now build modems as well, but they're not integrated with the processor. At 14nm FinFET, it's likely less of an issue of power consumption and more of a time-to-market and cost issue.
Right now everything points to Samsung being ready to deliver Galaxy S6 devices with Exynos 7 and LTE, so the time to market won't be an issue for Samsung. In fact, its own modem was rumored to be Cat. 10, while Qualcomm's Snapdragon 810 will only use Cat. 9 (after being upgraded recently from Cat. 6), so the company's modem could even be considered ahead of Qualcomm's modem in certain ways. Because Samsung is the one making the processor and the modem, the cost issue is also not a big one, although it may be when trying to sell it to other OEMs. Integrated processors and modems should be cheaper when built together instead of separately.
Samsung is poised to do well with its chip and foundry divisions this year, according to ET News' industry sources. Most of the manufacturing for the Apple A9 chip is rumored to go back to Samsung this year, thanks to its 14nm FinFET process being slightly ahead in both performance and time-to-market compared to TSMC's 16nm FinFET. The new ARMv8-based Exynos 7 chip is also seen as a strong and compelling offer at the high-end, mainly because Samsung managed to build it on its own 14nm process, while Qualcomm is only able to use 20nm right now for its Snapdragon 810.
Qualcomm should be able to build the Snapdragon 820 (the 810's successor) on 14nm later this year, using Samsung's process technology. A few months of lead time may be enough for Samsung to steal some of Qualcomm's biggest customers though, if the company decides to compete directly with Qualcomm by selling Exynos 7 to other companies. Even if Samsung doesn't do that, taking Qualcomm chips out of its own popular high-end devices could significantly impact Qualcomm's revenues in the long term.
From a strategic point of view, it makes sense for Samsung to use a chip that's not from Qualcomm, as long as it's competitive enough (which it may be, according to early reports), regardless of who makes it. Almost all smartphone makers except Apple use Qualcomm chips at the high-end right now. The processor is still a significant feature even in today's high-powered smartphones, and virtually all companies use the same chips.
Samsung, more than anyone, as the smartphone market leader, would probably want to differentiate itself through the processor it uses. Utilizing its own chip would allow it to better integrate it with its software, offer more extensive support for it, and also use more cutting-edge process technologies, months ahead of its competitors.
The first device to use the 14nm Exynos 7420 will be the Galaxy S6, which is supposed to come out this March.