Photo credit: www.phonearena.com
Several challenges have beset Samsung in its efforts to develop the 3nm Exynos 2500 application processor for the forthcoming Galaxy S25 series. Among the primary issues is the low yield rate at Samsung Foundry, which has necessitated additional expenditures for acquiring the costly silicon wafers needed to produce a sufficient quantity of Exynos 2500 chips. These chips are intended for the Galaxy S25 and Galaxy S25+ models, which will be released outside the U.S., China, and Canada.
Reserve your Samsung Galaxy S25+ or S25 Ultra handset now!
Samsung might be anticipated to rectify the yield issues at Samsung Foundry to enable the Exynos 2600 AP to be featured in next year’s Galaxy S26 and Galaxy S26+ devices across most global markets. However, external factors may pose further complications, as reports indicate that Arm Holdings is contemplating a significant increase—potentially up to 300%—in the royalty fees it charges for licensing its Arm v9 architecture. This proposed hike could dramatically impact Samsung’s cost structure, as the company sources Arm’s CPU cores for its Exynos processors.
While Qualcomm recently adjusted the pricing for its Snapdragon 8 Elite AP—set to power the entire Galaxy S25 lineup—Samsung may have leverage to negotiate more favorable terms for the Snapdragon 8 Elite 2, especially if it chooses to abandon the Exynos 2600 project. Qualcomm’s integration of custom Oryon CPU cores into its chipsets further solidifies their different positioning compared to Samsung, which ceased producing custom cores for Exynos in 2020 and has shown no inclination to restart this practice.
As Qualcomm continues to license Arm’s instruction set architecture, it remains in a better position to absorb any potential price hikes without severely impacting its business. Conversely, Samsung could face escalating costs due to its reliance on externally sourced Arm cores, making its financial outlook for future flagship models uncertain. The twin pressures of botched production yields at the 3nm level and Qualcomm’s raised prices may compel Samsung to reconsider the pricing strategy for the Galaxy S25 series. Looking to the future, the pricing strategy for the Galaxy S26 series will hinge critically on the scale of any royalty increases imposed by Arm and the extent to which Samsung can enhance its production efficiency at the Foundry level.
At this juncture, the situation remains precarious, with numerous variables that could shape Samsung’s upcoming product offerings and their market positioning.
Source
www.phonearena.com