According to Taiwan Economic News, the move is designed to help Qualcomm cope with problems that TSMC is having making enough chips for it.
UMC will start supplying Snapdragon S4 processors and 3G/4G baseband chips made using 28nm process in the fourth quarter of 2012.
Apparently UMC is signed up to make 3-5,000 wafers per month which is a third of TSMC's volumes. The chips have been taped out in a UMC 28-nm CMOS process and passed verification.
The Economic News could not provide any details of the supply deal with Samsung.
Interestingly UMC rushed out and bought a licence for 20nm CMOS process including FinFETs from IBM, which might help its manufacturing process roadmap.
The whole thing looks fairly bad for TSMC which seems to be in Qualcomm's bad books. Last week Paul Jacobs, CEO of Qualcomm Inc., reportedly said he has not ruled out owning a wafer fab or putting large amounts of cash down to ensure the firm's supply of semiconductor chips.