Samsung Electronics Co Ltd will now solely be responsible for the manufacturing of Qualcomm Inc's new flagship mobile chip, the company announced recently.
The announcement is set to boost the South Korean tech giant as it vies for deals with bigger rival TSMC.
The deal, which some analysts estimate is worth over USD one billion, comes as Samsung, a major Apple Inc supplier, is heading into another profit drop this year due to slowing demand for consumer electronics and components.
"This is very significant because never before has Qualcomm used foundries other than TSMC to make high-end chipsets," said Maybank Kim Eng analyst Warren Lau.
"Samsung could gain more than USD one billion in revenue from the Snapdragon 820 orders at its Taiwanese rival's expense," he added.
Though Qualcomm's order alone will not rejuvenate Samsung's earnings, the deal suggests gathering momentum in the Korean firm's efforts to grow its foundry business to diversify its revenue stream.
