Chip powering Galaxy S25 Ultra much more expensive than iPhone 16 Pro Max's SoC

We've mentioned before that the Snapdragon 8 Gen 4 application processor (AP), the chip that will power next year's Galaxy S25 Ultra, is an expensive component priced anywhere from $190 to $240 each depending on which leaker posted the right information. Considering that the predecessor chip, the Snapdragon 8 Gen 3 AP was priced at $200, we believe that the $240 price for the Snapdragon 8 Gen 4 chipset is true.

At $240, the Snapdragon 8 Gen 4 would be 20% higher than the Snapdragon 8 Gen 3. One possible reason for the price increase is the hike in the price of the silicon wafers used by TSMC to produce chips using its second-gen 3nm process node (N3E). This will be the first Snapdragon 8 flagship chip produced on the 3nm node and with the wafer prices doubling from $15K to $30K, a higher price would make sense.

However, MediaTek's just announced Dimensity 9400 AP, also manufactured by TSMC using its second-gen 3nm node, is priced at $155. As a rival to the Snapdragon 8 Gen 4 SoC, and with the Exynos 2500 out of the picture due to Samsung Foundry's yield problems at 3nm, one hot rumor has Samsung using the Dimensity 9400 to power the Galaxy S25 base model in most parts of the world.

Silicon wafer prices can be negotiated between the foundry and the client. TSMC is also using its second-generation 3nm process node for its number one customer, Apple, to build the A18 and A18 Pro chipsets. Securities firm TD Cowan revealed in a bill of materials (BOM) it computed for the iPhone 16 Pro Max that the A18 Pro AP powering the top-of-the-line handset cost Apple only $45 each. That is a 13% hike from the $40 Apple paid for the A17 Pro which powered the iPhone 15 Pro and iPhone 15 Pro Max. But it is much cheaper than the Snapdragon 8 Gen 4 as Qualcomm's chip is four to five times more expensive than the A18 Pro AP.

One reason for the wide discrepancy in pricing between Apple and Qualcomm is that the latter has to turn around and sell the Snapdragon 8 Gen 4 to a buyer while pricing the chip high enough to make a decent profit. Apple, on the other hand, uses the chips that are built by TSMC for its own device which means there is one less tier of pricing required.

In addition, Qualcomm is debuting its own CPU cores for the Snapdragon 8 Gen 4 rather than licensing Cortex CPU cores from Arm. Looking to retrieve some of the costs to develop these cores could also result in higher pricing for Qualcomm's flagship AP this year.

The Snapdragon 8 Gen 4 will be unveiled by Qualcomm during the Snapdragon Summit which will take place in Hawaii from October 21 through October 23rd.