Qualcomm and MediaTek Challenge Apple with 2 nm Chips: But Prices Risk Exploding

Qualcomm and MediaTek seem determined to close the performance gap that still separates them from Apple processors. According to recent rumors, both companies have decided to adopt TSMC's N2P 2-nanometer manufacturing process for the next generation of their flagship chips, aiming to increase frequencies and performance in both single-core and multi-core scenarios.

This strategy aims to compete more directly with the upcoming Apple A20 and A20 Pro, expected in the next iPhones. In fact, a more advanced manufacturing node allows for greater efficiency and performance improvement margins, but it also comes with significantly higher production costs compared to current technologies.

According to estimates, the first 2 nm SoCs from Qualcomm and MediaTek could cost about 20% more than the models currently available. This increase could weigh heavily on companies that produce Android smartphones, especially in a period where margins are already under pressure due to DRAM shortages and the resulting increase in component prices.

Qualcomm, MediaTek, and the Strategy to Close the Gap with Apple Chips

For Qualcomm, the situation could be particularly delicate. The Snapdragon 8 Elite Gen 5 chip was reportedly priced around $280 per unit, and a successor made at 2 nanometers could be even more expensive. For this reason, the company may continue to focus on the more accessible Snapdragon 8 Elite Gen 6 standard while also maintaining a more advanced version aimed at premium devices.

MediaTek could also encounter similar obstacles with the upcoming Dimensity 9600. According to the leaker Smart Chip Insider, both companies are highly motivated to reduce Apple's advantage in the mobile chip sector, even while being aware that rising costs could slow widespread adoption by manufacturers.

At the moment, it is unclear what MediaTek's final strategy will be, but it is possible that the company will continue to use TSMC's 3-nanometer processes for non-flagship models to maintain a more balanced range between performance and prices.