Industry and Samsung officials said Thursday that Samsung has agreed with Qualcomm to produce the latter's Snapdragon S4 chipsets using Samsung?s 28-nanometer technology, starting from the first half of 2013.

The Korean Times also reported today that the two companies have agreed in principle on chip production and are now trying to iron out details.

The partnership could help Samsung strengthen its capabilities for non-memory chip management. The Korean technology giant plans to invest more in non-memory chips this year than in conventional memory chips, possibly gaining orders from companies that have been traditionally using chips made by TSMC, such as Nvidia and Texas Instruments.

Qualcomm's MSM8960 chipsets are currently being used in the latest smartphones by Samsung, LG Electronics, Motorola and Taiwan's HTC.

Qualcomm has also designated United Microelectronics Corp. (UMC) as another supplier with the capacity to help cope with tight supply of the leading-edge process at TSMC.

Market experts say Samsung is one of the few players that can threaten TSMC's leadership as Samsung has abundant cash and top-class memory chip-making technology.

Samsung currently controls near 50 percent of the global memory chip market.

With the Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung producing the Qualcomm chipsets, analysts expect the 28nm supply will improve from early next year.