Android Chipset Makers Lose Millions by Ignoring Apple’s Chip Binning Strategy

Android chipset makers Qualcomm and MediaTek are missing out on significant cost savings by not adopting chip binning, a strategy Apple has used since the original iPad. Binning involves sorting chips by performance and using lower-performing units in cheaper products. Apple bins chips like the A18 Pro for the MacBook Neo, using a 6-core CPU and 5-core GPU instead of the full 6-core CPU and 6-core GPU.

Apple's binning approach reduces waste

Qualcomm's only binned SoC is the Snapdragon 8 Elite with a 7-core CPU variant, model number SM8750-3-AB. The Snapdragon 8 Elite Gen 6 Pro is estimated to cost 300+ USD (about $300) this year, putting pressure on margins amid a DRAM crisis. Qualcomm plans to keep the Snapdragon 8 Elite Gen 5 as a lower-cost option and may bin the Gen 6 with reduced GPU and cache.

Apple's binning approach allows it to use defective chips in cheaper devices, reducing waste and cost. Qualcomm and MediaTek have largely avoided this practice, potentially losing millions. The Wall Street Journal reported on the financial impact of this strategy gap.

MediaTek's plans for chip binning remain unclear. Qualcomm has not confirmed the full extent of its binning strategy for future chips.