Your new premium smartphone could get more expensive
high-end smartphones are set to get at least 5% more expensive, driven by use of more powerful and complex chipsets for AI use-cases along with more powerful memory modules and other components. Leading chipset companies-Qualcomm and MediaTek-have guided gross margins on mobile phone chipsets to go down in the December quarter due to increasing wafer costs.
Taiwanese chipset maker TSMC is raising costs for leading-edge 5nm and 3nm processors that are majorly utilised by smartphone chipmakers. Meanwhile, chipset designer ARM is also raising licensing costs for companies like MediaTek, even as it is embroiled in a lawsuit against Qualcomm for its use of custom CPU cores in its latest generation mobile chipset. Experts believe Qualcomm will likely settle ahead of the hearing in December, with ARM pushing to raise license fees with Qualcomm as well.
The chipset manufacturing cost increase may very well be passed down to consumers as chipmakers said it will look to maintain its current gross margins, executives said. «I think our goal is trying to maintain the gross margin within the range, which is 46% to 48%. For next year, in general, I guess that's still going to be our range. We're trying to sell our value and pass down some of the costs to our customers. I think that still remains our strategy and goal,» said David Ku, chief financial officer, MediaTek, during a recent earnings call.
Industry executives said the latest generation chipsets, set to power high-end Android handsets, are already around 20% more
