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Qualcomm licensing blocked Samsung from selling Exynos chips

South Korea's Fair Trade Commission has claimed that Qualcomm blocked Samsung from selling its own Exynos processors to other manufacturers through a patent licensing deal, ZDNet reports.

The deal reportedly dates back to 1993, when an agreement was reached to allow Samsung to make its own modem chips using certain CDMA patents, but only for use in its own phones. Subsequently, either Samsung or the phone maker would've had to pay Qualcomm licensing fees if they wanted to use an Exynos SoC in a non-Samsung phone. Talks between the two to reach an alternative agreement reportedly broke down in 2013.

Since then, non-Samsung Exynos phones have been few and far between, with the Meizu Pro 5, being a rare example.

Qualcomm's patents are considered standards essential patents, which must be licensed under fair terms.

Qualcomm's patents are considered standards essential patents, which must be licensed under fair terms, and the chip giant fell foul of Korea's regulators last December, when it was handed an $865 million fine. Qualcomm is currently fighting a ruling which would require it to change its licensing terms.

While Qualcomm's licensing terms may hold back Samsung's semiconductor business, the group has benefitted in other areas from Qualcomm's dominance. The past two generations of high-end Snapdragon processors have been manufactured by Samsung, and the upcoming Galaxy S8 is widely reported to have first dibs on the upcoming Snapdragon 835, giving Samsung a competitive advantage over rivals.

Qualcomm faces similar legal action in from the U.S. FTC over allegedly abusive licensing practices, and in 2015 it paid a $975 million antitrust fine in China. Apple is currently suing the firm in the U.S. and China, claiming Qualcomm has abused its position in the market.

Alex Dobie
Alex Dobie

Alex is global Executive Editor for Android Central, and is usually found in the UK. He has been blogging since before it was called that, and currently most of his time is spent leading video for AC, which involves pointing a camera at phones and speaking words at a microphone. He would just love to hear your thoughts at alex@androidcentral.com, or on the social things at @alexdobie.

29 Comments
  • Probably only Meizu fans care.
  • Samsung were making phones in 1993?
  • That was my first thought as well... Lol
  • Samsung's first mobile phone was built in 1985 and sold in 1988.
  • This is a big problem, no company should be able to do this. As consumers we need choices​ in CPU that power our smartphones.
  • Agreed. I sincerely doubt this could have been contemplated by either one of these parties, 25 years ago. This should be reworked to promote more fair competition.
  • Neither I nor anyone aside from Qualcomm or Samsung is gonig to have access to the deal in place. But I think we can all agree the patent system should serve its purpose of rewarding inventions. A couple bucks in royalties ponied up for Qualcomm for each chip sold or a bulk rate license will do the trick. But the extent to which Exynos is practically blocked and the rate Qualcomm charges per chip leaves me guessing the price is _way_ higher than a cup of coffee.
  • Wow those are huge fines. They must be making boatloads of money.
  • Jeez talk about trying to monopolize the chip market
  • Guess Qualcomm is a bully. I don't really care about this because clearly phones in the US wouldn't have the exynos anyway. Samsung doesn't even use it in their own phones.
  • Samsung does use their Exynos chip in their phones that are used outside the USA. For example, the Galaxy S7 shipped to and used in Canada and other markets use the Exynos chipset.
  • Samsung doesn't use Exynos processors in their own US phones due to a different patent issue with Qualcomm. Samsung would love to use their own chips in the US, but doing so would require them to pay pretty hefty royalties to Qualcomm, so it's just cheaper to buy Snapdragon chips.
  • LOL REALLY?http://www.phonearena.com/news/Samsung-Galaxy-S7-Snapdragon-820-vs-Exyno... https://www.cnet.com/news/the-chips-of-samsungs-galaxy-s5-exynos-and-sna...
    https://www.fonepaw.com/solution/root-samsung-galaxy-s7.html . WAKE me scrub when you are not clueless.
    Samsung 5, 6, and 7 have all had the Exynos chip , just not all U.S versions. GEE I can't imagine why.
  • Also scrub , my Samsung 6 edge plus has an Exynos processor http://www.tomsguide.com/us/note5-s6-edge-plus-compared,news-21458.html.............. Its the U.S version. Here's also a link to the carrier versions that all use the Exynos processor.http://gizmodo.com/the-galaxy-s6-edge-plus-yep-it-certainly-is-bigger-17...
  • Why they would like to ruind something so speedy like the Exynos from Samsung
  • This is all fun and games for the attorney's hired by these huge companies. Money being handed back and forth all the while these lawyers go jet-setting around the world pocketing their fees. What a world
  • Either the lawyers are on retainer (paid a set fee for legal services) or are direct employees of the company (the company where I work does this). While it's probably a hefty sum in either case, it's most likely more cost-effective in the long run.
  • So, according to this article, Samsung could sell their own phones in the US with their own Exynos chips, with no problems. Wouldn't that be nice. I guess that's why it was no problem to use their own Exynos chips in the S6 and the Note 5, instead of the Heatdragon 810. Shoots the sh*t out of the BS argument that Samsung has to use Snapdragon chips in the US, doesn't it?
  • Yup. Shows that Samsung definitely has a choice, at least based on this information. There may be other factors or preclusions, but I have thought it curious that the Exynos didn't end up I'm the US version of the S7 or the S8.
  • Lets b fair, Samsung would have to charge extra to cover the added royalties to sell the Exynos chip in the US. How much extra? Who knows. Would you pay extra to have an Exynos chip in your phone?
  • You wouldn't, unless left with no choice because the alternative drops the ball (Note 5).
  • I don't defend Qualcomm very often but if Qualcomm signs a deal to use Samsung as a foundry, it's generally acceptable that the foundry will have a no-compete agreement to build clones of Qualcomm's chips, that's just common sense ethics.
  • except no foundry is going to last 20 years.
  • I don't generally defend Qualcomm, but ... Qualcomm signed a foundry deal with Samsung in 1993. It's generally ethical and pretty standard for a foundry to sign a no-compete deal with its customers. In other words, the foundry agrees not to start a business to clone the chips going through its foundry and sell them, ripping off its own foundry customers. This is just common ethical business-sense. It's why Qualcomm itself stopped building its own phones (no-compete with its chipset customers), and sold the division to Kyocera. They had no choice but to start the CDMA phone business just to get CDMA off the ground. Whomever wrote this article probably has no idea what they are talking about ...
  • This makes much more sense. +2 to Intel for you.
  • Or probably too lazy to research on the subject matter.
  • Am I the only one who read the part that said Apple was suing for abuse of market position? Talk about irony.......
  • Lol so true. Then again Apple sued folks cuz there phones had rounded corners. They also made the 6+ in direct response to Samsungs Note 4.. SIZE matters. Then again Apples a hypocrite like all these actors that said they would leave the country if Trump became president. Steve Jobs once said there phones were the perfect size and would NEVER make bigger. .. UHUH.
  • It wouldn't be a huge problem if Qualcomm CPUs were actually optimized to run but since the SD has to fit various versions of manufacturers needs it is fit all size kind of CPU, this is repeatedly shown over and over with the Exynos vs sd in the same device such as the S7, S5 and so on that Exynos performs better. Not just in performance, but in battery life as well. I know the GPU in the SD is the top of the line, but who the heck actually sits there and plays video games for hours on end? The most I play game is 2 to 5 minutes at a time and touch based controls suck. So while the SD has the GPU over almost everyone, it is not much of a selling point when I need to get the most of my battery and run multiple applications such as fitness tracker, music app and perhaps reading the news while doing my 30 minute walk.