Qualcomm is in talks with Samsung Electronics over contract manufacturing of next-generation two-nanometer chips, a move that underscores the escalating competition and strategic recalibration underway in the global semiconductor supply chain. The discussions, reported by South Korea’s Korea Economic Daily, come as chipmakers and foundries race to secure leadership in advanced process technologies that will define performance, power efficiency, and profitability across smartphones, artificial intelligence, and high-performance computing over the next decade.

According to the report, Qualcomm Chief Executive Cristiano Amon said design work for the two-nanometer chips has already been completed, with commercialization targeted in the near future. Samsung Electronics is said to be the first foundry Qualcomm is engaging in discussions with, although multiple manufacturing partners are likely being evaluated. Qualcomm declined to comment, while Samsung Electronics said it does not discuss specific customers.

Why Two Nanometers Matters Strategically

The shift toward two-nanometer manufacturing represents a critical inflection point for the semiconductor industry. Chips produced at this scale promise substantial gains in performance and energy efficiency, essential for sustaining advances in AI workloads, premium mobile devices, and edge computing. For Qualcomm, whose Snapdragon processors sit at the heart of many flagship smartphones and increasingly AI-enabled devices, access to reliable and scalable cutting-edge manufacturing is not optional—it is existential.

At the same time, the transition is capital-intensive and technologically demanding, making foundry partnerships more strategic than ever. With fewer players capable of delivering viable two-nanometer yields, customers are weighing not just performance but supply security, pricing power, and long-term roadmaps.

Samsung’s Foundry Ambitions and Recovery Push

For Samsung, a Qualcomm deal would represent a meaningful endorsement of its foundry business, which has struggled with profitability and yield challenges in recent years. Co-CEO and chip division head Jun Young-hyun said last week that recent supply agreements have positioned the foundry unit for a “great leap forward.” That optimism follows Samsung’s $16.5 billion contract signed with Tesla in July, signaling renewed traction with marquee customers.

Winning Qualcomm’s two-nanometer business would further strengthen Samsung’s credibility as a top-tier alternative to Taiwan Semiconductor Manufacturing Co., particularly as geopolitical risks and customer diversification concerns reshape sourcing strategies across the industry.

Competitive Dynamics in the Foundry Market

The reported talks also highlight how semiconductor customers are becoming more deliberate—and opportunistic—in choosing manufacturing partners. With advanced nodes increasingly concentrated among a handful of firms, buyers like Qualcomm are seeking leverage through multi-foundry engagement. This approach reduces dependency on a single supplier while potentially improving negotiating power on pricing, capacity allocation, and technology customization.

For Samsung, success will hinge not only on process leadership claims but also on consistent execution, yields, and the ability to scale volumes efficiently. Any stumble at two nanometers could quickly redirect customers elsewhere, underscoring the high-stakes nature of these negotiations.

What to Watch Going Forward

As the semiconductor cycle turns toward next-generation nodes, the outcome of Qualcomm’s foundry discussions will be closely watched by investors and competitors alike. A confirmed deal would validate Samsung’s recovery narrative and intensify competition at the leading edge of chipmaking. For Qualcomm, it could signal a more diversified manufacturing strategy aligned with growing AI and performance demands.

Ultimately, the talks reflect a broader truth of the semiconductor landscape: technological leadership is inseparable from strategic partnerships, and control over advanced manufacturing may prove as valuable as chip design itself.