Qualcomm is dangerously close to pricing themselves out of the market

Qualcomm has been steadily increasing the price of its chipsets over the years. The current model, the Snapdragon 8 Elite, is rumored to cost $190 per chip, about a 20% jump over its predecessors. But Qualcomm isn’t stopping there. A report from Korean media outlet Kipost suggests that the Snapdragon 8 Elite Gen 2 (or whatever it will be called) could see another significant price hike.

This means that even a 10% increase in price could post the cost of the chip into the $200 range. But maybe Qualcomm believes that its prices could be justified. Digital Chat Station claims on Weibo that the Gen 2 could be manufactured using TSMC’s N3P node. This could result in better transistor density for improved performance and efficiency. Perhaps these gains are significant enough for Qualcomm to justify it to their partners.

However, we are concerned that the increasing prices could result in Qualcomm potentially paving a way for its competition. While some OEMs might have absorbed some of the costs over the years, as the chips get more pricey, it will eventually cut into their profit margins. This could result in a couple of scenarios.

One of these scenarios is where the costs are passed down to customers. This could lead to consumers being unhappy and not buying the newer phones. Another potential scenario is that OEMs will just seek an alternative chipset. MediaTek’s flagship Dimensity series has been making waves in the recent years, so the increased prices could give MediaTek a chance to start stealing Qualcomm’s market share.