Qualcomm (QCOM.US) Snapdragon Summit Preview: 2nm dual-core debuts, AI diversified narratives ushered in key verification

The Zhitong Finance App learned that Qualcomm (QCOM.US) will usher in a time window closely watched by the market this week. The chipmaker is scheduled to host the annual Snapdragon (Snapdragon) summit on Maui, Hawaii from September 22 to 24, local time. Investors are eager to capture the latest signals about next-generation processors and AI computing strategies.

On the previous trading day, Qualcomm's stock price experienced its biggest one-day decline in three months, falling 5.8% to about $178, while the Philadelphia Semiconductor Index overall rose during the same period. The market generally attributes this abnormal trend to the end of profits after many weeks of continuous gains in the previous period — Qualcomm's stock price increased by about 18% over the past month, and valuations were rapidly stretched, laying the groundwork for position adjustments. The stock rallied about 1.5% before Monday's market. Since the beginning of the year, Qualcomm's stock price has risen by only 5.5%, which is not prominent in the semiconductor sector.

Two chips, one watershed

The central highlight of the summit was the unveiling of Qualcomm's next-generation flagship mobile platform. According to reports, Qualcomm is expected to release two chips: the SM8950 Snapdragon 8 Elite Gen 6 (sixth-generation Snapdragon 8 Extreme Edition), and the SM8975 Snapdragon 8 Elite Extreme Gen 6 (sixth-generation Snapdragon 8 Super Extreme Edition). “Super Extreme” in the name suggests that Qualcomm is imitating Apple's (AAPL.US) Pro strategy and further segmenting within the flagship hierarchy.

Both chips are expected to use the TSM.US (TSM.US) N2P (2nm) process. This will also be the first large-scale commercial 2nm mobile phone processor in the Android camp. Compared to the 3nm process, 2nm can reduce power consumption by 25% to 30% with the same performance. Samsung (SSNLF.US)'s 2nm GAA process has not reached Qualcomm's 70% mass production benchmark, and production capacity has been booked by customers such as Tesla (TSLA.US), and it is reported that no orders have been received.

The gap at the specification level is the key to distinguishing the two chips. The standard version is equipped with an Adreno 845 GPU and supports LPDDR5X memory; the Super Extreme Edition is upgraded to an Adreno 850 GPU, equipped with an additional 18MB dedicated graphics cache (GMEM), which exclusively supports LPDDR6 memory and UFS 5.0 flash memory, and the ultra-large core frequency is close to 5 GHz. Both use a 2+3+3 eight-core three-cluster architecture, are equipped with third-generation self-developed Oryon CPUs, and share a 16MB L2 cache.

One variable not to be overlooked, though, is cost. The price of TSMC's 2nm wafers has risen sharply, causing the cost of the Super Extreme Edition to exceed 300 US dollars per unit, which is about 20% higher than the previous generation. Combined with the increase in the price of memory, the cost of the chip plus memory has already exceeded 400 US dollars. This means that the price increase of flagship phones equipped with top chips in the second half of the year is almost a foregone conclusion. Whether the terminal demand side can absorb this cost pressure is one of the core variables investors need to track.

More than just a phone

If flagship chips are the “face” of the summit, then the diversification transformation that Qualcomm is promoting is the “inside.” The mobile phone business still accounts for most of Qualcomm's revenue, but the growth rate has clearly slowed. In the third quarter of fiscal year 2026, Qualcomm's mobile phone chip revenue fell 20% year over year to US$5.086 billion, mainly affected by major OEMs reducing chip purchases, digesting inventory, and tight memory supply. Management expects Chinese OEM mobile phone revenue to have bottomed out in the quarter and is expected to achieve double-digit month-on-month growth in the fourth quarter.

While the mobile phone business is under pressure, Qualcomm's non-mobile phone sector is rapidly filling up positions. The automotive business is currently the brightest growth pole — Q3 revenue reached 1,588 billion US dollars, up 61% year on year, and achieved double digit year-on-year growth for 23 consecutive quarters. Qualcomm has raised the automobile business annualized revenue forecast for the 2026 fiscal year from the previous 6 billion US dollars to about 7 billion US dollars. As of the first three quarters, automotive revenue already accounted for about 14.2% of chip sales business (QCT) revenue, compared to only 6.2% in fiscal 2023.

Developments on the PC side are also worth watching. The Snapdragon X2 Elite series platform is equipped with a third-generation Oryon CPU and Hexagon NPU. The latter's computing power reached 80 TOPS, which improved 78% performance over the previous generation, and 5.6 times higher than the Intel Core Ultra 9 285H in the Geekbench AI 1.5 test. Qualcomm CEO Anmon said earlier that about 150 PC products equipped with Snapdragon processors are expected to be launched in 2026. Whether Qualcomm will further disclose new product plans or customer expansion on the PC side at the summit will be an important window to observe the execution of its PC strategy.

What is really causing the capital market to reprice Qualcomm is the data center business. On Investor Day in June of this year, Qualcomm upgraded the data center to a strategic core position for the first time, set a target of data center revenue exceeding 15 billion US dollars for the 2029 fiscal year, and raised the revenue target for non-mobile phone businesses to 40 billion US dollars from the previous 22 billion US dollars. According to the product roadmap, the AI200 and AI250 inference accelerators are scheduled to be commercialized in 2026 and 2027, respectively, while the Dragonfly C1000 data center CPU is targeted for deployment in 2028.

On September 8, Qualcomm announced that it has reached a multi-generation custom chip cooperation with Amazon (AMZN.US) AWS, focusing on the field of AI inference, and jointly developing an optical connection solution with a speed of up to 1.6T. As part of the deal, Qualcomm issued up to 25 million warrants to Amazon at an exercise price of $161.26 per share, with an expiration date of 2036. Meta (META.US) has previously confirmed that it will begin deploying the Dragonfly C1000 processor in 2028. Receiving orders from two hyperscale cloud service providers in a row is at least an initial proof of Qualcomm's data center narrative that its product capabilities are being taken seriously.

However, it should be noted that the competitive landscape in the data center chip market is far from reaching the stage where Qualcomm can relax — in the AI ASIC field, Broadcom (AVGO.US) and Maywell Technology (MRVL.US) are players that entered the market earlier; in the customized chip supply chain, ASIC design service providers such as Maywell Technology and Shixin directly compete with Qualcomm for the same group of cloud vendor customers. The $15 billion revenue target corresponds to a steep climbing curve, and execution risk should not be underestimated.