The rising cost of memory is putting a massive dent in the earnings of Android chipset manufacturers like Qualcomm and MediaTek, and even though these companies have managed to address the lower-tier end of the smartphone market through less capable SoCs, they continue to avoid a practice that Apple has adopted since the latter introduced the original iPad in 2010. Through chip binning, the California-based giant has managed to keep its chip production costs down by re-purposing them in non-flagship products and maximizing profits.

The latest example of Apple’s chip binning is with the MacBook Neo, which sports an A18 Pro sporting a 6-core CPU and a 5-core GPU instead of the 6-core CPU and 6-core GPU found in the same silicon powering the iPhone 16 Pro and iPhone 16 Pro Max. Chips that don’t qualify Apple’s strict quality-control checks for a specific product are often labeled as ‘defective,’ but that doesn’t mean these cannot be used in cheaper devices, and that’s ultimately where the savings come into play.

What’s interesting to note about this practice is that even though Apple’s chip binning strategy has been highlighted in recent years, The Wall Street Journal reports that these savings are being pocketed since the time of the original iPad and iPhone 4, both of which are powered by the A4. The units that didn’t pass Apple’s QC stage exhibited higher power draw, making them less than ideal for mobile devices. Instead, the company incorporated these chips into the Apple TV, which would remain plugged into an outlet.

A similar attribute was on display with the S7, and instead of the binned chipsets being discarded completely, Apple found use for them in the second-generation HomePod. For Android SoC makers, a silicon has to be introduced annually for smartphone partners to incorporate in their flagships. If memory serves us well, the only time that Qualcomm introduced a binned SoC was with the Snapdragon 8 Elite. A less powerful variant with the designation number SM8750-3-AB sports a 7-core CPU instead of an 8-core one, but that’s about it.

With the Snapdragon 8 Elite Gen 6 Pro estimated to cost $300+ this year, it’s becoming increasingly difficult for companies like Qualcomm to maintain their margins in the middle of a DRAM crisis, which is why the San Diego firm has a small ace up its sleeve. Instead of outright discontinuing its current-generation flagship SoC, the Snapdragon 8 Elite Gen 5, it’s being kept as an option for smartphone partners to maintain their margins and lower component costs.

Additionally, the standard Snapdragon 8 Elite Gen 6 will a less powerful GPU and reduced cache could serve as part of Qualcomm’s chip binning practices. As for MediaTek, we currently have no word on its plans to implement cost cuts in this area, but there’s no time like the present to observe a shift in business strategy.

News Source: The Wall Street Journal

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