Snapdragon 8 Gen 2 for Galaxy Costs Surge, Pushing Up Prices for Chinese Flagship Phones

Snapdragon 8 Gen 2 for Galaxy Costs Surge, Pushing Up Prices for Chinese Flagship PhonesRecent reports about Qualcomm's latest flagship chip, the Snapdragon 8 Gen 2 for Galaxy, have sparked widespread attention. Due to a significant cost increase, this chip is poised to set a new price record for mobile SoCs (system-on-chips)

Snapdragon 8 Gen 2 for Galaxy Costs Surge, Pushing Up Prices for Chinese Flagship Phones

Recent reports about Qualcomm's latest flagship chip, the Snapdragon 8 Gen 2 for Galaxy, have sparked widespread attention. Due to a significant cost increase, this chip is poised to set a new price record for mobile SoCs (system-on-chips). Sources indicate the cost of a single Snapdragon 8 Gen 2 for Galaxy chip is expected to reach \$180 (approximately 1281 yuan), marking a 15% jump compared to its predecessor.

The primary driver behind the increased cost of the Snapdragon 8 Gen 2 for Galaxy is its adoption of TSMC's N3P fabrication process. While this technology enhances the chip's market competitiveness, it also leads to higher production costs. Furthermore, the persistent increase in memory prices contributes to the overall cost rise.

According to a report by TF International Securities analyst, the projected shipment volume of Snapdragon 8 Gen 4 (anticipated to be the next generation of Snapdragon 8 Gen 2 for Galaxy) will reach 9 million units in the second half of 2024, representing a year-over-year growth of 50%. This growth can be attributed to extended shipment timelines, rising demand from Samsung, and positive developments in the Chinese smartphone market.

The analyst highlights that the rise in market share of Chinese brands, the growing proportion of high-end phones, and the recovery in phone shipments are key factors driving the increased shipment volume for Snapdragon 8 Gen 4. He predicts that the market share of high-end phones (priced over 4000 yuan) in China will expand from 25-30% in 2023 to 30-35% in 2024.

However, the inflated cost of the Snapdragon 8 Gen 2 for Galaxy is likely to have a direct impact on the overall pricing of Chinese flagship phones. Wang Teng, Deputy General Manager of Xiaomi's China Market Department and General Manager of the Redmi brand, stated that the primary reasons behind the price hikes of flagship phones are the increased cost resulting from the processor's upgrade to the 3nm fabrication process and the persistent memory price increases over the past year.

With the rising cost of the Snapdragon 8 Gen 2 for Galaxy, the market broadly anticipates a general price increase for Chinese flagship phones. This trend will likely impact consumers, who may have to pay higher prices to acquire phones equipped with the latest flagship chips.

Besides the price increase, the higher cost of the Snapdragon 8 Gen 2 for Galaxy could also intensify competition among phone manufacturers. To stay competitive, manufacturers may need to enhance their product value proposition or innovate in other areas to attract consumers.

Overall, the increased cost of the Snapdragon 8 Gen 2 for Galaxy is a noteworthy trend. It will not only affect phone pricing but also the competitive landscape of the market. Moving forward, phone manufacturers need to strike a balance between cost control and product innovation to navigate the intense competition and secure a winning position in the market.