Apparently the Qualcomm Snapdragon 810 chip had a nasty habit of overheating when Samsung came to test it. Samsung will use its own processors instead.
This would be a huge blow to Qualcomm which is the world’s largest maker of semiconductors used in phones, and has been supplying Samsung with chips that run the company’s best-selling handsets for ages.
Samsung is Qualcomm’s second-largest customer, providing about 12 percent of its sales, according to Bloomberg supply chain analysis.
It also gives Samsung a reason to boost its own processor-making division as it spends $15 billion on a new factory outside Seoul.
Samsung is expected to release the next Galaxy S as early as March, and it can’t dare to take the risk to use any of the chips in question for its most important model.
The company has been taking a kicking lately as smartphone sales slow. Releasing a phone into the market with a hot chip could sink it.
Qualcomm has not commented on the news shares fell on the news. In Europe they fell to 1.2 percent. Samsung shares rose 1.7 percent as news got out.
Qualcomm said in April its latest 808 and 810 processors will start appearing in phones at the beginning of this year and will feature more advanced computing, graphics and radio capabilities. Xiaomi and LG are among the manufacturers preparing to release models with the Snapdragon 810.