Qualcomm's Snapdragon 810 Lives, but It Probably Won't Be Cheap

The first evidence of Qualcomm's 20-nanometer Snapdragon 810 is upon us, but the bigger question is whether it'll be economical enough to matter.

Jun 28, 2014 at 2:30PM

To get a sense of how development of certain chips is tracking, I like to look at imports and exports of engineering and qualification samples to and from India via a website known as Zauba. According to Zauba, the first Qualcomm (NASDAQ:QCOM) Snapdragon 810 chips -- known by their less flashy MSM8994 part number -- built on Taiwan Semiconductor's (NYSE:TSM) 20-nanometer process appear to be alive and running. This suggests that Qualcomm will indeed begin mass sampling of these parts during the second half of 2014.

What do we have here? 
Zauba doesn't list too many of these systems -- about 27 in total -- but these do look like Snapdragon 810 test systems. The chip codename is correct, the systems use 4GB of DDR4 memory, and they run Android. It's unclear whether these are smartphone or tablet form-factor development platforms, but it's not really a big deal either way.

The implications of the Snapdragon 810
The Snapdragon 810 is a very high-end mobile system on a chip with four ARM Holdings (NASDAQ:ARMH) Cortex A57 cores and four ARM A53 cores in a big.LITTLE configuration. Further, this chip sports an integrated LTE-Advanced category 7 modem as well as a whole bunch of other goodies.

All told, for flagship smartphones and tablets set to hit the market during 2015, the Snapdragon 810 is likely to be the best choice available.

How expensive will this chip be?
Murmurings here and there peg the current Snapdragon 800/801 system-on-a-chip products at about $40. This isn't all that bad of a deal, since it comes with a world-class LTE-Advanced modem, fast CPU and GPU power, and exceptional camera and imaging capabilities.

Now, if we assume that the cost per transistor at the 20-nanometer node is about the same as the 28-nanometer node and if we assume twice as many transistors in Snapdragon 810/MSM8994 over the Snapdragon 800/MSM8974, per Qualcomm's statements, then it should be roughly twice the cost to build. 

Now, twice the manufacturing cost doesn't necessarily mean twice the price as far as the handset vendor is concerned, as Qualcomm may be willing to take a margin hit. In fact, at a recent investor conference, Qualcomm CFO George Davis indicated that 2015 chip margins may suffer a bit as the 20-nanometer ramp begins in earnest.

If we assume some margin concessions on Qualcomm's part, we could be looking at a chip that still costs $60 to $70. Pretty pricey for a smartphone chip, right?

Foolish bottom line
While there is little doubt that Qualcomm (among others) will continue to push the high end of the mobile chip space with ever-increasing processing power and die sizes, the economics of these high-end chips is going to get pretty rough.

With smartphones shifting increasingly toward the low-end and mid-range, and with even the high end stagnating and seeing pricing pressure, the mobile chip race may fundamentally shift to trying deliver the most features and performance at the lowest cost, rather than the most features at seemingly increasing costs. 

Leaked: Apple's next smart device (warning -- it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of these devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and to see Apple's newest smart gizmo, just click here!

Ashraf Eassa owns shares of ARM Holdings. The Motley Fool recommends Apple and owns shares of Apple and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers