A system-on-chip (SoC) is one chip that holds all the main parts of a computer: the processor, the graphics engine, an AI engine, the camera processor and, in most phones, the modem that connects to the mobile network. Every smartphone runs on one, and so do tablets, smart TVs and many laptops. A phone's SoC is about the size of a fingernail.
A chip is a small, flat piece of silicon that carries billions of transistors, microscopic electrical switches. Older computers had a separate chip for each job, joined by wires on a circuit board. Putting all of them on one piece of silicon makes the phone smaller and saves power, because signals travel millimetres instead of centimetres.
A phone SoC has several blocks. The CPU, the general-purpose processor, usually has eight cores: a few fast ones for heavy work and several slower ones that use little power for light work. The GPU draws the screen and runs games. The NPU, or neural processing unit, runs AI models, for example to recognise faces or to clean up photos. The ISP, or image signal processor, turns the camera sensor's raw readings into a photo. The cellular modem sends and receives data over 4G and 5G. The page on CPU, GPU, SoC and FPGA compares the kinds of processor.
Take, for example, a college student in Bhopal who photographs a printed notice about exam dates and asks her phone to copy the text. The camera sensor sends 50 million raw readings, one for each pixel. The ISP turns them into a photo in a fraction of a second. The NPU runs a text-recognition model on the photo and finds the words. The CPU runs the app that shows the words and lets her paste them into a message. The GPU draws each new screen. Throughout, the SoC keeps its working data in DRAM, the phone's fast memory, and saves the photo in flash memory.
Leading phone SoCs are made on what the industry calls 3- or 4-nanometre processes. A nanometre is a millionth of a millimetre. The name no longer measures any one part of a transistor. It is a label for each new generation, in which transistors are smaller and more of them fit on the same area.
A few companies design most phone SoCs. They are fabless: they design the chips, and a foundry, mostly in Taiwan, makes them. Their design centres in Bengaluru, Hyderabad and Chennai are among their largest. They rarely design every block themselves. The CPU cores usually follow the Arm instruction set and are often licensed through processor IP licensing, with a small royalty paid on every chip, as explained on semiconductor IP licensing. The graphics and AI blocks can be licensed too, as GPU and NPU IP.
The SoC largely decides what a phone can do and what it will cost. So when a phone brand chooses one for a new model, it is a large design win for the chip company.