By Han Joo-yeob

Samsung Electronics will unveil a smartphone with Intel’s Atom chips as early as this year. It would be the first time for Samsung to develop a smartphone based on Intel’s x86 application processor. Intel has gone to the extremes of lowering chip prices to near their costs to sell products to Samsung, the world’s No. 1 smartphone maker.

Wireless Business Division of Samsung Electronics has recently started the development of a smartphone based on Intel Atom Z3500 (codenamed Moorefield). Moorefield is a smartphone application processor produced in a 22 nanometer process. The 64-bit chip has a quad-core CPU (central processing unit), while its GPU (graphic processing unit) is built with the PowerVR G6430 of British-based Imagination Technologies. Moorefield supports the Android OS (operating system).

Intel developed Moorefield for premium smartphones. But it has a drawback. When clocked at the maximum (2.3GHz), Moorefield consumes much power and generates much heat. To compensate this disadvantage, Intel offered to Samsung less than $7 per chip, which is around the production cost. Experts say that Intel’s offer is “unconventional,” as other premium application processors are usually sold at $20-25. Intel is taking a low price approach to gain a bigger share in the smartphone and tablet processor market, such as offering subsidies to device makers buying its chips.

Samsung Electronics plans to fix the speed of its Moorefield-based smartphones at 1.6~1.7GHz, which is about 30 percent lower than the maximum capacity, to reduce power consumption. Samsung’s Moorefield-based smartphones will be for low-end users. It is said that Intel’s 3G or 4G LTE (long-term evolution) modems will be built in them.

According to market research firm Strategy Analytics, Intel sold 2.4 million smartphone application processors last year, which is a mere 0.2 percent market share. But its share is expected to drastically increase thanks to the successful bid with Samsung.

As the Wireless Business Division of Samsung Electronics has decided to buy Intel application processors, a reduction in the supply of the ‘Exynos’ processors of Samsung Electronics’ System LSI Division is forecast. The Wireless Business Division has used the six-core Exynos in low-end smartphones, including the Galaxy K Zoom and the Galaxy Note 3 Neo. The Wireless Business Division is said to have already pressured the System LSI Division to lower its prices to the level of Intel. An insider in the market said, “Intel, which is desperate to boost its share in the mobile market, is playing a chicken game in the application processor market.”

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