Qualcomm Snapdragon Summit – Ghostbusters

Qualcomm slays the 64-bit ghost.

• Qualcomm has slain the ghost of 64-bit computing by returning to custom CPUs in smartphones with a big leap in performance that will have competitors working harder to beat the new benchmark.
• Qualcomm held the first day of its Snapdragon Summit where announced the migration of its custom Oryon CPU core to mobile and hinted at what it thinks AI is going to do to the man-machine interface in digital devices.
  • First, Snapdragon 8 Elite: which brings the Oryon custom CPU to smartphones and upgrades most of the other components.
  • It also brings such a large jump in performance and efficiency that comparison to the Snapdragon 8 Gen 3 was more than enough for the company to make its point.
  • Here the 8 Elite offers a 45% increase in both performance and power efficiency over the previous generation.
  • According to the benchmarks it is also at least as good or somewhat better than Apple’s new A18 Pro which is what underpins the claim that Android has finally won back performance leadership in smartphones from iOS.
  • The 8 Elite uses a 2^nd generation Oryon core which when compared to the 1^st generation Oryon core in the X Elite can demonstrate a 30% performance improvement.
  • However, it is important to note the 8 Elite has been designed for mobile which means that power efficiency is even more important than it is in PCs.
  • Hence, we are not about to see smartphones with more processing power than laptops in the real world.
  • This is merely an indication of both the jump that is being offered in mobile as well as how much scope there is to improve the X Elite and X Elite Plus when the next version comes out.
  • The Adreno GPU and Hexagon NPU have also been redesigned and are also delivering substantial (circa 40%) improvements in both performance and power efficiency over the previous generation.
  • This is a far cry from the incremental improvements that Apple has been announcing recently which is a strong indication Qualcomm is now enabling both the Windows and Android ecosystems to offer real competition to Apple for the first time in a while.
  • This should help reduce the slow bleeding of users from Windows and Android to iOS and MacOS and perhaps even switch some the other way.
  • Second, natural language: where Qualcomm thinks that natural language capability could drastically alter the man-machine interface.
  • This is a story that has been told before but unlike the promises made in 2017 when we were told that our cars would soon show us empathy, in 2024 the technology is finally in place to deliver it.
  • This has been enabled by the invention of the transformer architecture and the creation of LLMs which means that a machine can understand natural language, interpret strangely worded requests correctly as well as understand context and circumstance.
  • Adding voice to the input and the output means that voice becomes a realistic man-machine interface for the first time ever.
  • However, voice adds a novel intolerance to latency which in my opinion means that the LLM that powers the voice must run locally on the device or the conversation will be stilted and unrealistic.
  • This is one reason (other than economics) why inference at the edge is important meaning that a migration to voice as the MMI plays directly to Qualcomm’s strength as an edge processor company.
  • The problem is that there is great scepticism about whether or not users want to talk to their devices rather than touch them and this hurdle will take some overcoming given the scale of the failure when this was tried in 2017 and 2018.
  • Automotive offers the greatest uplift in utility for the voice use case given that eyes and hands are supposed to be doing something else and so I suspect that it is in this domain where the first serious attempt to migrate to voice will be seen.
• Qualcomm is seeing good traction in PCs with the first generation of Oryon in the X Elite and X Plus and this jump in performance in battery life has now made its way to smartphones.
• I am pretty sure that the entirety of Qualcomm’s portfolio will rapidly be migrated to Oryon which puts it in a good position to grow into a number of new device categories.
• The two that offer the most immediate potential are PCs and Automotive with today’s 8 Elite launch more likely to cement its position rather than grow it meaningfully as it is so large already.
• If Qualcomm is right about LLMs changing the human-machine interface, this could accelerate the growth of silicon in the vehicle and remove some of the barriers to the adoption of the Metaverse.
• If the Metaverse really starts take off with augmented reality glasses, then Qualcomm is already very well positioned but I think that this is both uncertain and so long-term that almost all investors and observers will not care at this point in time.
• Day 1 saw a solid product launch that underlines the investment case leaving me more than happy to continue holding Qualcomm as a great way to play the AI adjacency of inference at the edge.