By now, we all know that Qualcomm has trouble satisfying the high demand for its S4 processors, which come integrated with LTE. The Snapdragon S4 is the only chip with this feature, so most manufacturers that want to launch their phones in the USA right now have no choice but to go with Qualcomm. That includes even Samsung and their Galaxy S3 phone, although Samsung makes its own chips usually.

Qualcomm doesn’t want to leave so much money on the table, knowing that the longer the chip demand is higher than the supply, the more (potential) revenue they stand to lose. We’ve heard persistent rumors that Qualcomm is looking to diversify its manufacturing partners or even to start its own foundry business. Now, the fabless chip maker is working towards a solution to its supply issues, by signing partnerships with both UMC (the second largest Taiwan-based foundry) and Samsung, one of their main competitors, and, at the same time, customers, to manufacture its 28nm S4 processors and LTE modems.

UMC Taiwan

The collaboration with UMC is expected to increase Qualcomm’s S4 and LTE basebands supply by 20-30% by the end of this year. The chips manufactured at UMC will start shipping in devices in the last quarter of 2012. Last week, UMC announced that it licensed the 20nm CMOS process and FinFET technology (similar to Intel’s “3D” chips) from IBM, so the partnership between the two companies might also offer some long-term benefits to Qualcomm.

We don’t have any details about the partnership with Samsung. Samsung right now only uses the 32nm process, but they might move to 28nm by the end of the year, for their upcoming Cortex A15-based Exynos 5250 processor. So they should be able to handle Qualcomm’s S4 chips as well. Unfortunately for Qualcomm, that also means that Samsung will be able to really compete with the S4 processor. And, if the Exynos 5250 comes with integrated LTE, Samsung won’t be forced anymore to buy Qualcomm’s chips for its US devices.