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To get a sense of how development of certain chips is tracking, I like to look at imports and exports of engineering and qualification samples to and from India via a website known as Zauba. According to Zauba, the first Qualcomm Snapdragon 810 chips — known by their less flashy MSM8994 part number — built on Taiwan Semiconductor‘s 20-nanometer process appear to be alive and running. This suggests that Qualcomm will indeed begin mass sampling of these parts during the second half of 2014.

What do we have here? 
Zauba doesn’t list too many of these systems — about 27 in total — but these do look like Snapdragon 810 test systems. The chip codename is correct, the systems use 4GB of DDR4 memory, and they run Android. It’s unclear whether these are smartphone or tablet form-factor development platforms, but it’s not really a big deal either way.

The implications of the Snapdragon 810
The Snapdragon 810 is a very high-end mobile system on a chip with four ARM Holdings Cortex A57 cores and four ARM A53 cores in a big.LITTLE configuration. Further, this chip sports an integrated LTE-Advanced category 7 modem as well as a whole bunch of other goodies.

All told, for flagship smartphones and tablets set to hit the market during 2015, the Snapdragon 810 is likely to be the best choice available.

How expensive will this chip be?
Murmurings here and there peg the current Snapdragon 800/801 system-on-a-chip products at about $40. This isn’t all that bad of a deal, since it comes with a world-class LTE-Advanced modem, fast CPU and GPU power, and exceptional camera and imaging capabilities.

Now, if we assume that the cost per transistor at the 20-nanometer node is about the same as the 28-nanometer node and if we assume twice as many transistors in Snapdragon 810/MSM8994 over the Snapdragon 800/MSM8974, per Qualcomm’s statements, then it should be roughly twice the cost to build. 

Now, twice the manufacturing cost doesn’t necessarily mean twice the price as far as the handset vendor is concerned, as Qualcomm may be willing to take a margin hit. In fact, at a recent investor conference, Qualcomm CFO George Davis indicated that 2015 chip margins may suffer a bit as the 20-nanometer ramp begins in earnest.

If we assume some margin concessions on Qualcomm’s part, we could be looking at a chip that still costs $60 to $70. Pretty pricey for a smartphone chip, right?

Foolish bottom line
While there is little doubt that Qualcomm (among others) will continue to push the high end of the mobile chip space with ever-increasing processing power and die sizes, the economics of these high-end chips is going to get pretty rough.

With smartphones shifting increasingly toward the low-end and mid-range, and with even the high end stagnating and seeing pricing pressure, the mobile chip race may fundamentally shift to trying deliver the most features and performance at the lowest cost, rather than the most features at seemingly increasing costs. 

Leaked: Apple’s next smart device (warning — it may shock you)
Apple recently recruited a secret-development “dream team” to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of these devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and to see Apple’s newest smart gizmo, just click here!

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The article Qualcomm’s Snapdragon 810 Lives, but It Probably Won’t Be Cheap originally appeared on Fool.com.

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Ashraf Eassa owns shares of ARM Holdings. The Motley Fool recommends Apple and owns shares of Apple and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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