Samsung's journey in developing the 3nm Exynos 2500 application processor (AP) faces substantial obstacles. The company encountered numerous challenges last year while trying to implement this chipset into its upcoming flagship devices, the Galaxy S25 series. Primary among these hurdles was the insufficient yield at Samsung Foundry's 3nm production node. This shortfall necessitates a greater expenditure from Samsung to secure the high-cost silicon wafers essential for manufacturing adequate Exynos 2500 chips for the Galaxy S25 and Galaxy S25+ models, particularly in markets outside the U.S., China, and Canada.
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Despite expectations that Samsung would focus on resolving its production yield issues to prepare the Exynos 2600 AP for the Galaxy S26 and Galaxy S26+, rumors suggest that an unforeseen challenge may compel Samsung to revert to Snapdragon chipsets for all Galaxy S26 units. Reports indicate that Arm is contemplating a staggering 300% increase in the per-chip royalty it collects from licensees of its Arm v9 architecture.
Samsung licenses Arm's CPU cores for its Exynos processors, meaning the anticipated price hikes could drastically elevate production costs. Although Qualcomm recently adjusted their pricing for the Snapdragon 8 Elite AP (which powers the Galaxy S25 lineup this year), if Samsung opts to forgo the Exynos 2600 in favor of the Snapdragon 8 Elite 2, it may have a better negotiating position, given Qualcomm's transition to its proprietary Oryon CPU cores.
Qualcomm continues to pay Arm for licensing its instruction set architecture, ensuring the compatibility of its semiconductors with Android, which runs on an Arm-based platform. However, any royalty increases by Arm would likely have a more profound impact on Samsung. Historically, Samsung developed custom cores for its Exynos chipsets, a strategy that could have benefitted its pricing structure, but since 2020, the company discontinued this approach without plans for revival.
Early last year, speculation surfaced about Samsung and Arm collaborating on custom iterations of Arm's X-series and A-series CPU cores with a focus on future 2nm production. Yet, there has been no recent update regarding these developments, and the timeline for when Samsung might manufacture Exynos APs using 2nm technology remains uncertain.
The persistent challenges stemming from low yields at Samsung Foundry's 3nm nodes combined with Qualcomm's price increases could unfortunately lead to price hikes for the Galaxy S25 series this year. The pricing for the Galaxy S26 series will hinge on whether Arm enacts its rumored royalty increases and the extent of those hikes. Should Samsung decide to keep the Exynos 2600 in production, its success will heavily depend on improvements in the foundry's production yield. Currently, the situation is quite precarious.
