Qualcomm’s Snapdragon 8 Elite Gen 5 costs $240 – $280 per unit, which is 46% of Samsung Galaxy S26 Ultra’s interpolated BOM of $613.<\/b>
\nQualcomm has snared Samsung for good and, for the foreseeable future at least, no amount of Exynos performance boost will be sufficient for the South Korean behemoth to break free of this stranglehold. Samsung is Qualcomm’s goose that lays golden eggs, and those eggs will come in the form of the Galaxy S26 Ultra this time around
Samsung currently has a patent-license agreement with Qualcomm, whereby the former has secured access to the latter’s patented technology through 2030. Samsung also signed a multi-year, multi-region agreement with Qualcomm back in 2024, locking in access to the latest Snapdragon flagship chips.
The problem with these agreements, however, lies in their extractive nature, which is now forcing Samsung to undertake painful and regressive cost-cutting measures, which include the biggest selfie camera hole ever used on a Galaxy S-series Ultra variant.
As we reported earlier today, Samsung is apparently gearing up to use Qualcomm’s Snapdragon 8 Elite Gen 5 chip exclusively on the Galaxy S26 Ultra. While this constitutes an apparent step-down from a recent claim made by Qualcomm during its earnings call, where the company’s management had declared that it expected to maintain its new 75 percent baseline share with Samsung’s upcoming Galaxy S26 series, the arrangement will still net a veritable windfall for the chipmaker. Let’s crunch some numbers.
Qualcomm’s Snapdragon 8 Elite chip, which featured in the Galaxy S25 Ultra, cost Samsung around $190 per unit, constituting around 36 percent of the smartphone’s Bill of Materials (BOM) cost of around $523.
In contrast, Qualcomm’s Snapdragon 8 Elite Gen 5 reportedly costs between $240 and $280 per unit. Assuming everything else in the BOM remains the same, the chip will correspond to around 46 percent of the Samsung Galaxy S26 Ultra’s interpolated BOM of $613 (assuming a unit cost of $280 for the Snapdragon 8 Elite Gen 5)!
TSMC has reportedly informed its major clients of imminent price hikes for its sub-5nm advanced chip fabrication processes. The price hikes are purportedly in the 8 to 10 percent range, and are slated to go into effect next year. This means that the cost of the Snapdragon 8 Elite Gen 5 chip might yet rise further.
Things do not stop here. Samsung also pays a royalty of $16.25 on each smartphone that Samsung sell. The royalty is intended to compensate Qualcomm for licensing its technologies to the South Korean behemoth. In the first half of 2025, Samsung sold around 22.5 million Galaxy S25 series smartphones, with Qualcomm netting $365 million from the lineup via this arrangement.
We’ve already reported extensively on why the cost of the LPDDR5X continues to rise. As such, Samsung is facing acute price pressures from nearly all angles, forcing it to cut corners by pegging larger bezels on the Galaxy S26 Ultra or opting for a larger hole for its selfie camera.
Yet, no cost pressure is expected to be as acute as the one Samsung faces from the Snapdragon 8 Elite Gen 5 chip. It is for this reason that the Exynos 2600 chip is so important. If Samsung can demonstrate that its in-house SoC is capable of going toe-to-toe with the latest flagship chip from Qualcomm, it would place itself in a stronger negotiation position. Of course, the Exynos 2600 still has to prove its mettle, despite early encouraging signs.
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