Qualcomm stock climbs on release of new Snapdragon 888 chip

Qualcomm has announced its newest high-end chip, the Snapdragon 888, and its stock climbed on Tuesday following the announcement. The new chip features a 5G modem and is designed for Android phones. As the top supplier of chips for Android phones, Qualcomm stands to benefit greatly from its new chips, and its stock reflected that.

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New Snapdragon 888 boosts Qualcomm stock

The Snapdragon 888 supports a wide array of 5G networks, offers better graphics rendering, and improves artificial intelligence functions for image and facial recognition, among other things. The chip will be the main chip found in most high-end Android devices that launch next year. Qualcomm stock jumped after the company said several phone makers, including Motorola, Oppo and Xiaomi, are already planning on using the Snapdragon 888.

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Qualcomm spends about three years on average developing new high-end chips. The performance and features are important factors in convincing smartphone and tablet makers to use Qualcomm’s chips instead of less expensive processors from other companies.

Some companies, like Apple, Huawei and Samsung, have begun making their chips in-house, which has increased competition for Qualcomm in recent years. However, Samsung continues to use Qualcomm chips in devices sold in some parts of the world, even while using its own in-house chips for devices sold in other parts.

Roadmap is set

According to CNBC, Mobile Senior Vice President Alex Katouzian said Qualcomm’s 800-series chips set “the tone for the rest of the roadmap.” He explained that within three months, they will add similar functionality from the Snapdragon 888 to their 700-series chips. Then after another three months, they will add it to their 600 chips, and three months after that, the functionality is added to their 400 chips.

Qualcomm’s newest chips point to what capabilities high-end Android phones will have in the future. Katouzian said next year’s $250 or $300 phone will probably perform better than a phone that cost $600 or $700 two years ago.

Among the big improvements in the Snapdragon 888 this year is integrated 5G, which is significant because previously, smartphone makers had to use two different chips. The 5G integration also uses less power. Other big improvements include more powerful hardware for artificial intelligence and an Adreno GPU for better gaming.

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