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Samsung could sell Exynos chips to more OEMs, including ZTE

The deal would not only help ZTE as it looks for a Snapdragon replacement, it would also see Samsung increase the market share of its Exynos chips.

Published onMay 16, 2018

A Samsung Exynos processor.
  • Samsung is reportedly in talks with ZTE and other OEMs about supplying them with Exynos chips.
  • ZTE has recently been subject to a trade ban from the U.S., meaning it can no longer use chips made by Qualcomm.
  • Samsung is reportedly talking to “all OEMs” as it looks to expand its Exynos brand.

Reuters has reported that Samsung is in talks with a number of smartphone makers, including troubled Chinese manufacturer ZTE, to start supplying them with mobile processor chips from its Exynos brand. In an interview, Inyup Kang, the head of Samsung’s System LSI division, said the company is “talking to all OEMs” about the supply of chips.

While there has been no deal agreed with ZTE or other brands yet, Kang said that he expects to announce a new client for Exynos chipsets in the first half of 2019.

Recently, the U.S. government banned U.S. companies from selling products to ZTE for the next seven years. This strangled ZTE’s phone production as many of its devices use Snapdragon chips from Qualcomm and other American companies. Recent estimates suggest that between half and 65 percent of ZTE devices use Snapdragon chips.

Since the ban, ZTE has halted major operations and there have been reports that stock of ZTE devices in China is running low.

While the U.S. government has shown signs that it is willing to backtrack on this ban, Samsung could still see the uncertainty around ZTE as an opportunity to get its Exynos chips into more devices.

Samsung is reportedly the fastest growing player in the mobile processing chips industry

In 2017, Samsung became the world’s largest chipmaker, although much of the company’s revenue comes from its memory and flash storage products. However, its Exynos line of mobile chips has been growing rapidly — Counterpoint Research says Samsung is the fastest growing player in the mobile processing chips industry.

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The growth has been boosted by the fact that some versions of Samsung’s most popular devices use Exynos chips. For example, while markets such as the U.S., China, Latin America, and Japan get the Snapdragon version of the Samsung Galaxy S9, much of the rest of the world get the version with the Samsung’s own Exynos chip.

Currently, the only other smartphone manufacturer using Exynos chips is Meizu Technology. The Meizu M6S, released in January this year, uses an Exynos 5 Series chip. Previously, some devices made by Lenovo used Exynos chips.

This is all a sign of the increase in competition in the mobile processor industry. As well as the rise of Samsung, Huawei has been increasingly using its Kirin line of chips in its own devices.

Next up: How screwed is ZTE right now?

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