The competition between Samsung Electronics and Qualcomm over smartphone application processors (AP) has been ignited. Public attention is drawn to whether SEC will be able to destroy the stronghold that Qualcomm has had for a long time with the Exynos 7420 based on the 14nm process.

According to industry insiders on January 25, as the 64bit AP began to be installed in premium smartphones, such as the Galaxy S6 and the G Flex 2, this year, an uncompromising match between the ‘Snap Dragon 810’ of Qualcomm, which has been dominating the market for a long time, and the ‘Exynos 7420’ of Samsung Electronics is predicted.

SEC is planning to drastically increase the use of its ‘Exynos 7420’ in its strategic model Galaxy S6 this year. Qualcomm’s ‘Snap Dragon 810’ was applied to the G Flex 2, recently released by LG Electronics, and Xiaomi’s Mi Note Pro. The two APs will also compete fiercely to find their way into other manufacturers’ premium smartphones scheduled to be unveiled in February or March.

Looking at the disclosed specifications, e.g. the CPU speed, process and power consumption, Samsung’s Exynos 7420 has the upper hand. The operating speed of Exynos is 2.1㎓, faster than that of Qualcomm’s Snap Dragon 810 (1.6㎓). As the 14nm technology is applied, it consumes less power than the Qualcomm chip based on the 20nm technology. However, only Qualcomm can offer the communication modem and AP in one chip.

“It will be possible to check the advantages and disadvantages besides the disclosed specifications only after the phones are released,” said an industry insider. “However, the superiority in specifications will definitely give a marketing opportunity to Samsung Electronics’ AP.”

Recently the industry atmosphere is quite favorable to SEC. For starters, the company has great confidence in the performance of the ‘Exynos 7,’ which the company developed on its own using the 14nm FinFET process. Some forecast that SEC will recover from the poor performance of the ‘Exynos 5410’ in just 2 years and get the better of its rival Qualcomm in 2015.

The System LSI Division of SEC had a hard time because of the heat problem of the Exynos 5410 in the Galaxy S4 back in 2013. Afterwards the company had to use more Qualcomm APs in the Galaxy series, and the Exynos suffered a great deal.

As the Exynos 6 series was not released last year, there was a rumor in the industry that Samsung would abandon the Exynos business.

The Exynos 7 series that came after so much waiting is a promising new product that will enable the company to raise its share of the mobile AP business this year. The industry consensus is that it will be a product that will be quite competitive in the mobile AP market, which has been monopolized by Qualcomm.

SEC moved the modem development team, which used to be in the Wireless Business Division, to the System LSI Division last year, and is now carrying out a development project for integrating the AP and the modem chip.

The company is trying to develop a chip integrated with the modem chip, which has a high technological barrier, on its own, and rapidly chase Qualcomm.

The securities industry predicts that Samsung’s system LSI will do a fine business this year thanks to the Exynos 7420.

As the new AP has better performance than the market anticipated, and Samsung won the new AP foundry orders from Apple by means of the 14nm process technology, the performance of its foundry segment will also improve. The securities industry predicted that, though the system LSI business marked a KRW1 trillion deficit last year, it will run a surplus of KRW100 billion this year.

Qualcomm announced that it solved the recent heat problem of the ‘Snap Dragon 810.’ However, it is not actively responding to comparing AP performance with Samsung. The industry believes that, as Qualcomm has been leading the AP market over the years, it is trying to prevent the competition with Samsung itself from working to the advantage of the newcomer.