Qualcomm's Strategic Manufacturing Rivalry with Intel and Its Implications for Semiconductor Investing

The semiconductor industry in 2025 is defined by a high-stakes rivalry between Qualcomm and Intel, two titans navigating divergent paths in foundry dynamics and manufacturing strategies. As global demand for AI, 5G, and edge computing accelerates, their choices to diversify supply chains, adopt advanced nodes, and leverage geopolitical incentives will shape the competitive landscape—and investor returns—for years to come.

Qualcomm’s Diversification Gambit: From TSMC to Samsung

Qualcomm, long reliant on TSMC for its cutting-edge chips, is now actively diversifying its foundry partnerships to mitigate risks tied to supply chain concentration. According to a report by Interactivesilicon.ai, Qualcomm is validating Samsung’s 2nm process for its upcoming Snapdragon 8 Elite 2 chip, codenamed “Kaanapali S,” and a potential high-performance application chip, “Trailblazer” [1]. This move signals a strategic pivot to reduce dependence on TSMC, which dominates the foundry market with a 67.6% share in Q1 2025 [6]. Samsung’s 2nm node, expected to achieve 40% yield rates by late 2025, could provide Qualcomm with a viable alternative, particularly as TSMC phases out 6-inch wafer production by 2027 [3].

However, this partnership is not without risks. Samsung’s struggles with 3nm yield rates have eroded trust among major clients like Apple and NVIDIA [1]. Qualcomm’s decision to engage with Samsung hinges on the latter’s ability to stabilize its 2nm production at Hwaseong and Pyeongtaek facilities by 2025 [4]. For investors, this underscores Qualcomm’s proactive approach to supply chain resilience but also highlights the volatility of relying on a foundry still rebuilding its credibility.

Intel’s Foundry Pivot: 14A as the Make-or-Break Node

Intel’s post-2025 roadmap is anchored on its 14A process node, a critical pivot from its earlier 18A strategy. At the Intel Foundry Direct Connect 2025 event, CEO Lip-Bu Tan emphasized that the 14A node—featuring second-generation RibbonFET and PowerVia backside power delivery—could deliver 15–20% performance gains and 25–35% power savings over 18A [2]. This node is positioned to compete directly with TSMC’s N2 and Samsung’s 2nm, with Intel projecting a 15% improvement in performance-per-watt [2].

Yet, Intel’s foundry ambitions remain unproven. While the 18A node is already in risk production for internal products like Panther Lake and Clearwater Forest, external adoption has been lukewarm, with key customers like Broadcom showing little enthusiasm [2]. The 14A node’s success will depend on securing a “significant external customer” to justify the $24 billion in capital expenditures and $2.2 billion in CHIPS Act funding [4]. For investors, this represents a high-reward, high-risk bet: if Intel can execute on 14A, it could reclaim foundry market share from TSMC and Samsung. Failure, however, would deepen its reliance on internal production and delay its foundry turnaround.

Foundry Market Dynamics: TSMC’s Dominance and Emerging Threats

TSMC’s dominance in the foundry market remains unshakable, with a 66% share in 2025 driven by its leadership in AI fabrication and advanced packaging [1]. Its N2 node, entering mass production in late 2024, is already attracting clients like Apple and NVIDIA [5]. However, TSMC’s recent proposal to form a joint venture with Intel for foundry operations—pitched to companies like AMD and Nvidia—signals a shift toward collaborative models [1]. This could dilute TSMC’s control over leading-edge manufacturing, creating opportunities for Intel and Samsung to gain traction.

Samsung, meanwhile, is banking on its 2nm node to reclaim market share. With Qualcomm as a potential anchor customer, Samsung aims to scale production to 60% yield rates by 2025 [1]. If successful, this could challenge TSMC’s dominance in mobile and AI chips, particularly in markets where geopolitical tensions favor domestic production. For investors, Samsung’s resurgence represents a wildcard in the foundry race, with implications for Qualcomm’s supply chain flexibility and Intel’s 14A competitiveness.

Investment Implications: Navigating the Post-2025 Semiconductor Landscape

The semiconductor sector’s growth in 2025—projected to reach $705 billion in global chip sales—offers opportunities for both Qualcomm and Intel [5]. Qualcomm’s 11.8% revenue growth forecast for 2025 outpaces Intel’s expected 4.3% decline, reflecting its stronger near-term positioning in 5G and AI [1]. However, Qualcomm’s reliance on external foundries exposes it to supply chain risks, particularly if Samsung’s 2nm adoption falters.

Intel’s long-term prospects hinge on its ability to execute the 14A roadmap and attract external customers. While its foundry business currently ranks outside the top ten in revenue, government subsidies and domestic manufacturing advantages could accelerate its growth [4]. Investors should monitor Intel’s 2026 milestones, including the Nova Lake CPU launch and 14A node readiness, as indicators of its foundry viability.

Conclusion

Qualcomm and Intel’s strategies in the post-2025 semiconductor landscape reflect divergent approaches to foundry dynamics. Qualcomm’s diversification into Samsung’s 2nm node underscores its focus on supply chain resilience, while Intel’s 14A pivot highlights its determination to reclaim foundry leadership. For investors, the key variables are Samsung’s yield improvements, TSMC’s joint venture ambitions, and Intel’s ability to secure external customers. As the industry navigates AI-driven demand and geopolitical shifts, both companies’ success will depend on their agility in adapting to a rapidly evolving foundry ecosystem.

Source:
[1] Samsung's Bold 2nm Leap: A Strategic Bet on Qualcomm Partnership [https://www.interactivesilicon.ai/news/samsung-s-bold-2nm-leap-a-strategic-bet-on-qualcomm-partnership/]
[2] Intel Foundry Direct Connect 2025 Expands Roadmap And Partnerships [https://www.forbes.com/sites/moorinsights/2025/06/05/intel-foundry-direct-connect-2025-expands-roadmap-and-partnerships/]
[3] TSMC 6-inch Wafer Fab Exit Affirms Strategy Shift [https://www.design-reuse.com/news/202529193-tsmc-6-inch-wafer-fab-exit-affirms-strategy-shift/]
[4] Intel: Future Of Foundry Business Hinges On A 'Significant External Customer' [https://www.crn.com/news/components-peripherals/2025/intel-future-of-foundry-business-hinges-on-a-significant-external-customer]
[5] Global Semiconductor Industry Trends and 2025 Outlook [https://ts2.tech/en/global-semiconductor-industry-trends-and-2025-outlook-ai-boom-advanced-nodes-and-geopolitics-report-june-27th-2025/]
[6] Samsung vs. TSMC vs. Intel: Who's Winning the Foundry Market? [https://patentpc.com/blog/samsung-vs-tsmc-vs-intel-whos-winning-the-foundry-market-latest-numbers]