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Samsung wants to sell more chips to up and coming Chinese smartphone makers

Samsung is going to have a glut of capacity after Apple leaves them, so the company wants to start selling their chips to Chinese smartphone vendors.
January 9, 2013

There isn’t a single thing you can point to that can explain Samsung’s current market position. It’s the combination of component manufacturing, ridiculous amounts of advertising, and just plain good products that have given the South Korean handset maker the top spot in the mobile space. Focusing on the component manufacturing for a moment, without Samsung there would be no iPhone. In fact, every device that runs iOS has a chip inside that was produced at a Samsung factory. We know that Apple wants to distance themselves from Samsung, so that presents an important question: What’s Samsung going to do with all the chip building capacity they’ve been building up over the years?

The obvious answer is to simply make more Samsung phones, but according to Stephen Woo, President of Samsung’s System LSI business, the company wants to do something a bit different. They want to help out the little guys, companies like Huawei and Lenovo, by building chips for them. Here’s what he told Reuters in an interview earlier today:

“As there are just two smartphone makers that are doing really well, chipmakers supplying them have grown in tandem. So we plan to bolster our relationship with those key customers. We should diversify our customer base and are making such efforts already, adding some Chinese customers. We see emerging players who have potential to grow in smartphones and we will continue to make efforts to supply them with our chips.”

One thing Woo mentioned was the importance of the baseband, otherwise known as the part of the phone that allows it to connect to a cellular network. Woo bluntly said “we don’t have it.” He said Samsung is exploring their options, which is corporate slang for acquiring another company. Considering that ST-Ericsson will soon cease to exist, Samsung joining forces with Ericsson would give Qualcomm some proper competition.