Qualcomm (QCOM) typically makes quite a few chip announcements at its annual Snapdragon Summit event in Hawaii, and this year's event was no exception.
Among other things, the mobile chip and patent giant unveiled its next flagship mobile processor (the Snapdragon 865), a pair of mid-range processors (the Snapdragon 765 and 765G) with integrated 5G modems, a new processor for AR and VR headsets (the Snapdragon XR2), and a pair of processors for low-cost Windows notebooks (the Snapdragon 7c and 8c).
Here are some quick takeaways regarding Qualcomm's announcements.
1. Qualcomm Still Looks Very Strong in the High-End Android Market
As expected, the Snapdragon 865 packs a punch. It's made using an advanced, 7-nanometer (7nm), Taiwan Semiconductor (TSM) manufacturing process, has an 8-core CPU -- 4 high-performance cores based on Qualcomm's new Kryo 585 CPU core design, and 4 low-power cores based on the existing Kryo 385 design -- as well as a revamped GPU and dedicated AI and image co-processors that are much-improved from the ones inside of the Snapdragon 855.
Qualcomm claims the Kryo 585 and its new GPU (the Adreno 650) each deliver 25% performance improvements relative to their predecessors, that its AI co-processor can handle 15 trillion operations per second (twice as many as its predecessor) and that its image processor supports Dolby Vision, can capture 8K video and can process 2 gigapixels of image data per second.
Aside from its horsepower, the fact that the Snapdragon 865 can be paired with the company's top-of-the-line Snapdragon X55 5G modem, which should go into quite a few mass-market 5G phones next year, should work in its favor. While Samsung and Huawei can be expected to keep launching high-end Android phones featuring internally-developed processors -- in Samsung's case, the company used both Qualcomm and home-grown processors in its high-end phones -- Qualcomm should continue to more than hold its own against independent processor suppliers such as MediaTek in the high-end Android market.
2. Launching Cheaper Windows Processors Was Probably a Good Idea
Three years after Qualcomm, Microsoft (MSFT) and some major PC OEMs first announced that ARM-architecture Qualcomm processors would go inside of Windows 10 notebooks, Qualcomm-powered notebooks have made limited headway in spite of having integrated 4G modems and generally delivering very long battery lives and impressive always-on capabilities.
A key issue: Qualcomm has typically positioned its Windows processors, such as the Snapdragon 8cx, towards the high end of the notebook market, where consumers tend to be more demanding about both performance and app compatibility. And though having received support from Microsoft and some other big developers, there are still quite a few popular apps (including, for the moment, Google Chrome) that aren't yet supported by ARM Windows notebooks, at least not without emulation software that yields a healthy performance hit.
For this reason, launching processors meant for low-end notebooks feels like a strategically smart decision. Here, Qualcomm and its OEM partners will be competing for the dollars of notebook buyers who (in some cases, at least) might only be using a limited number of Windows apps, or who might be open to buying a Chromebook. Just maybe, a sales pitch revolving around the battery lives and always-on capabilities of Qualcomm-powered notebooks will work better here.
3. Qualcomm Is Intent on Being the Top Merchant Processor Supplier for AR and VR Headsets
Qualcomm has seen pretty good momentum lately in the AR/VR headset space, landing design wins for Microsoft's second-gen HoloLens headset, Facebook (FB) 's Oculus Go and Quest headsets and a slew of other noteworthy products. And with the Snapdragon XR2, the company seems to be upping the ante in a pretty meaningful way: Relative to the XR1, which launched last year, Qualcomm claims the XR2 delivers twice the CPU and GPU performance, as well as 4 times more video bandwidth and 11 times greater AI performance.
Both the AR and VR headset markets are still in their infancy, with unit volumes that are a tiny fraction of those seen by the smartphone market. And certainly, some headset developers -- including Apple (AAPL) , assuming reports about its AR headset efforts are accurate -- will develop their own processors. But as these markets grow, Qualcomm does look well-positioned to be the top independent processor supplier.
4. Qualcomm Will Be Using Both TSMC and Samsung's 7nm Process Nodes Next Year
TSMC, whose 7nm node is already used to manufacture the Snapdragon 855, X55 and 8cx, will also be making the Snapdragon 865. However, the Snapdragon 765 and 765G will rely on a Samsung 7nm process.
This disclosure comes after Nvidia ( NVDA) indicated it will use both TSMC and Samsung's 7nm nodes to manufacture GPUs relying on its next-gen Ampere architecture. Though TSMC still has a manufacturing tech lead -- the first process based on the company's next-gen 5nm node is set to see volume production commence in the first half of 2020 -- Samsung's 7nm traction is noteworthy. And with TSMC reportedly seeing stretched lead times for 7nm orders, it's probably a healthy thing for the chip industry.
