From 300 to 1400, the price of Snapdragon 8 series chips was exposed.
The price of Qualcomm's Snapdragon 8 series chips has nearly tripled in the past 10 years, from 300 yuan in the Snapdragon 800 era to about 1,400 yuan in the Snapdragon 8 Gen3. This astonishing increase has aroused widespread attention and heated discussions inside and outside the industry. As the "heart" of the Android flagship, the price of the Snapdragon 8 series chip directly determines the overall cost and terminal price of the mobile phone, so its price increase is large, which will inevitably have a profound impact on the mobile phone market.
To explore the reasons for the rising prices of Snapdragon 8 series chips, we have to start with the advanced manufacturing process. As the manufacturing process continues to move towards advanced nodes such as 5nm, 4nm, and 3nm, the difficulty and cost of chip manufacturing are increasing. In the case of the Snapdragon 8 Gen3, it uses TSMC's state-of-the-art 4nm process, which means that more transistors are integrated in a limited chip area, resulting in a significant increase in performance.
The investment in equipment and R&D required for advanced manufacturing processes is astronomical, which makes foundry costs skyrocket. It is understood that the foundry cost of TSMC's 4nm process has been as high as 20,000 US dollars / piece, and the foundry cost of the 3nm process is as high as nearly 30,000 US dollars / piece, which will undoubtedly be directly passed on to the manufacturing cost of the chip.
In addition to the influence of the manufacturing process, the complexity of chip design is also increasing. Taking the Snapdragon 8 Gen3 as an example, it not only integrates top-of-the-line CPU and GPU cores, but also supports a number of cutting-edge functions such as 5G baseband, AI accelerator, and image signal processor. In order to ensure the performance leadership of chips, Qualcomm must increase investment in research and development.
Qualcomm has occupied a monopoly position in the high-end chip market for a long time and lacks strong competitors, which is also one of the important reasons why it dares to raise prices significantly. In recent years, although manufacturers such as MediaTek and Samsung have performed well in the low-end chip market, they still lag behind Qualcomm in the field of flagship-level chips and cannot form a strong counterbalance to them.
The strong market demand is also an important driver driving up the price of Snapdragon 8 series chips. With the advent of the 5G era and the continuous enrichment of application scenarios such as artificial intelligence, image shooting, and game entertainment, consumers have higher and higher requirements for mobile phone performance, and the sales of flagship models are also rising. In the face of such a strong market demand, Qualcomm will naturally take the opportunity to increase chip pricing in order to obtain more profits.
The rising prices of Snapdragon 8 series chips have also put heavy pressure on mobile phone manufacturers. Taking Xiaomi as an example, its latest Xiaomi 14 Pro is equipped with a Snapdragon 8 Gen2 chip, with a starting price of up to 5999 yuan, which is nearly 1000 yuan higher than the previous generation Xiaomi 13 Pro. For ordinary consumers, such a high price will undoubtedly cause greater psychological pressure and purchase barriers.
The rising price of Snapdragon 8 series chips has had a profound impact on mobile phone manufacturers and consumers. From the perspective of mobile phone manufacturers, the sharp increase in chip costs will undoubtedly seriously erode their profit margins. Taking Xiaomi as an example, the starting price of Xiaomi 14 Pro is as high as 5999 yuan, which is nearly 1000 yuan higher than the previous generation Xiaomi 13 Pro, mainly due to the high price of the Snapdragon 8 Gen2 chip.
In the face of such a high chip cost, mobile phone manufacturers have to pass on the pressure to the terminal price, which makes the price of flagship models rising and unaffordable for ordinary consumers. I have a friend who has always been a phone enthusiast and updates his phone almost every year. Last year, he bought a flagship 5G mobile phone, which cost more than 6,000 yuan, but this year he plans to update it and finds that the price of the new model of the same model has broken through the 7,000 yuan mark, which makes him feel very surprised and helpless.
For low-end models, the rise in the price of Snapdragon chips has also dealt a heavy blow. Take Xiaomi Mi 11 as an example, it is equipped with a Snapdragon 888 chip, and the price at that time was around 1000 yuan. The Xiaomi 13 uses the Snapdragon 8 Gen 1 chip, and the price has exceeded 1200 yuan. Such a high chip cost has greatly compressed the profit margins of low-end models, and mobile phone manufacturers have to make compromises and trade-offs in terms of hardware configuration and process manufacturing.
Qualcomm's monopoly position in the high-end chip market has also put mobile phone manufacturers in a passive situation. Due to the lack of other alternative alternatives, mobile phone manufacturers had to "work for Qualcomm" and were forced to accept Qualcomm's pricing. A mobile phone industry insider revealed to me that Qualcomm takes the initiative to "visit" mobile phone manufacturers every year to exert some pressure on them to purchase the latest Snapdragon chips.
From the perspective of consumers, the rising price of Snapdragon chips will undoubtedly increase their purchase burden. I have some friends who have high performance requirements for mobile phones, and they tend to give preference to flagship models with the latest Snapdragon chips. When the price of the flagship machine broke through the 7,000 yuan mark, they also began to feel a little powerless.
Qualcomm's monopoly position in the high-end chip market also makes consumers lack more choice. In the absence of a strong alternative, consumers have had to passively accept Qualcomm's pricing, creating a kind of dependency. A mobile phone enthusiast friend once complained to me that when he recently bought a new phone, he found that the price of models equipped with Snapdragon 8 Gen 2 chips was generally more than 6,000 yuan, while the performance of flagship models equipped with chips of other brands was generally not ideal, which made him feel very helpless.
In the face of the rising price of Snapdragon 8 series chips, both inside and outside the industry are actively seeking solutions. From the perspective of mobile phone manufacturers, increasing investment in self-developed chips is an important way out. With its self-developed A-series chips, Apple has been ahead of the Android camp in terms of performance and power consumption, which undoubtedly gives a lot of inspiration to other mobile phone manufacturers.
In recent years, Samsung, Xiaomi, OPPO, vivo and other mobile phone manufacturers have increased their investment in self-developed chips. Taking Xiaomi as an example, it has launched a number of self-developed chips, including low-end chips such as Xiaomi 9 and Xiaomi 10, as well as the latest Xiaomi 13 A new generation of flagship chips. Although the performance of Xiaomi's self-developed chips cannot compete with the Snapdragon 8 series chips, the future development prospects are worth looking forward to.
In addition to self-developed chips, mobile phone manufacturers are also working hard to expand the mid-to-high-end market, in order to share the cost of chips through scale effect. Take OPPO as an example, its latest Find X6 Pro is equipped with a Snapdragon 8+ chip, priced at around 5000 yuan, compared to the 6000 yuan price of the Snapdragon 8 Gen2 model, which is more cost-effective. The key to this strategy is to provide mid-to-high-end models to meet mass consumer demand, so as to gain a larger market share and reduce the cost per chip.
From the perspective of chip suppliers, the reintroduction of competition is the key to solving the Qualcomm monopoly. Huawei's HiSilicon Kirin chips once competed with Snapdragon chips in the high-end market, providing consumers with more choices. Due to the impact of US sanctions, Huawei's chips once came to a standstill. If HiSilicon Kirin chips can re-enter the high-end market in the future, it will help break Qualcomm's monopoly and prompt it to re-examine its pricing strategy.
Samsung, MediaTek and other chip manufacturers are also increasing investment in the research and development of high-end chips, in order to form a strong competition with Qualcomm in the future. It is understood that Samsung is stepping up the research and development of the Exynos 2300 flagship chip based on the 5nm process, while MediaTek will also launch the Dimensity 9200 flagship chip based on the 4nm process, which is expected to be comparable to the Snapdragon 8 Gen2.
From the perspective of policies and regulations, standardizing chip pricing and maintaining fair competition in the market is also an important way out. The mainland has issued a series of policies and regulations aimed at breaking the monopoly in the chip field and promoting fair and orderly competition. The relevant authorities are expected to further strengthen supervision and control to prevent individual enterprises from taking advantage of their monopoly position to engage in unfair competition.