Consumers may face higher prices for flagship smartphones, prompting reassessment of value and performance
Qualcomm and MediaTek’s adoption of TSMC’s 3nm technology is changing the smartphone chipset market, driving up prices for flagship devices. The industry is grappling with the economic impact of emerging technology as manufacturers like Vivo raise prices on their latest models.
This year, major players in the smartphone chipset space are moving to TSMC’s 3nm lithography, with the Dimensity 9400 leading the way. However, this advancement comes at a significant cost, forcing cell phone manufacturers to raise prices. For example, Vivo has increased the price of its new X200 series by 7.5% to reflect the financial strain that comes with its latest chipset.
Last year, Apple was the only company to introduce a 3nm chipset, announcing the A17 Pro and M3 family. MediaTek and Qualcomm did not opt for TSMC’s older 3nm “N3B” node, primarily due to the prohibitively high tape-out costs estimated at around USD 1 billion for Apple’s M3 series. This financial barrier prevented the company from immediately taking advantage of the technology, forcing it to innovate with the Dimensity 9400 in response to stay competitive.
Despite this strategic move, the move to 3nm N3E technology has forced MediaTek’s partners to adjust their pricing structures, with reported average price increases of 7.5% on flagship models. In contrast, Apple is keeping the iPhone 15 Pro’s starting price at $999 and only introduces a $100 premium on the Pro Max by offering expanded storage options.
The exact manufacturing cost of the Dimensity 9400 remains unclear, but rumors suggest it will cost $155, 20 percent more than the Dimensity 9300. As chipset prices continue to soar, MediaTek finds itself limited to TSMC, especially as Samsung struggles to sell. Improve yield of proprietary 3nm GAA process. As transistor counts increase and lithography advances, these factors may combine to cause further price increases.
The impact of these cost increases is not limited to chipsets. Consumers may face higher prices for flagship smartphones, prompting them to reevaluate value and performance in an increasingly competitive market.
