Taiwanese fabless semiconductor firm MediaTek will likely reduce the price of its upcoming Helio P23 chipset, according to a report published by the Digitimes. Even though the reduction is not yet officially stated, many industry observers think that the tech company is pressured to make such a decision after its largest rival, Qualcomm, subsequently decreased the prices of its platform, the Snapdragon 450. Both SoCs are competing in the crowded mid-range smartphone market and in order to gain market share, it is important to keep prices as low as possible. The US-based company has reduced the price of its processor solution to less than $10.50 per piece while MediaTek initially charged $15 for its product. Sources of the publication claimed that the latter firm has brought down the cost of its SoC to $11-$12 but this is still not low enough to beat its rival's solutions. In order to stay competitive, the Taiwanese firm has to reduce its chip costs to less than $10.
Analysts attribute Qualcomm's capacity to undercut its rivals to its much lower manufacturing cost per chip. Both companies outsource their production to independent foundries. Qualcomm has contracted Samsung to fabricate its chips while MediaTek went with its fellow Taiwanese firm TSMC. However, Samsung charges a much lower fee for every silicon wafer produced by its foundries. In this specific case, Qualcomm pays the South Korean tech giant $2,500 per wafer. In comparison, TSMC charges MediaTek more than $3,500 to build its chips. The lower production expenses are then passed on to the smartphone manufacturers in the form of reduced prices.
Both the Helio P23 and the Snapdragon 450 share comparable specs. The two chipsets are likely to be powered by eight ARM Cortex A53 64-bit CPUs and Category 7 LTE modem. The Snapdragon 450 will utilize the Adreno 506 GPU while MediaTek is rumored to move away from ARM's graphics offerings and instead included PowerVR 7XTP GPUs into the chipset. It is expected that both solutions will be power-efficient due to the process node technologies used by the foundries. The solution developed by the Taiwanese firm is built using TSMC's 16nm process while the Snapdragon processor is fabricated using Samsung's 14nm process.