Cheap DAC vs Expensive DAC – What’s the Actual Difference?

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Many of my readers keep asking me to quantify the actual differences between DACS and whether it makes sense to shell out big bucks for an expensive DAC. So I thought it’s about time to dispel those myths without the usual audio BS, just the facts.

Myth #1 „You need a DAC“

No, you don’t. Here’s where consumers are frequently mislead by audio journalists. Any device capable of playing back digital music including smartphones and laptops already has a built-in DAC chip. After all, digital music is as you would expect in a „digital“ format. Consequently you need a chip to translate those 0s and 1s into an audible „analog“ signal. And CD players or music streamers usually have a built-in DAC, too. If this weren’t the case, your smartphone would simply stay silent :)

But let’s just say you want to improve the sound quality of your laptop or smartphone. What options do you have? Sure, you could add an external DAC. But just adding more components of theoretically higher quality isn’t automatically a guarantee for better quality. Let me explain why in the next section.

Myth #2 „Outboard DACS will always improve the sound of your setup“

Let’s first examine how an audio signal travels to an external digital-to-analog converter. In the case of your laptop, you would most likely use the USB port to hook up an external USB DAC. I’m excluding some laptops like the older MacBooks which come with optical outputs. Your digital signal needs to be buffered, sent across a cable over a distance, re-clocked and then fed to a different DAC chip. And the traces on PCB boards technically count as wires, too.

Sure, the signal itself is essentially “digital”. But you cannot make 0s and 1s somehow magically fly across a data line. So we need to express a digital signal in the “analog” domain. That means your ones and zeroes are essentially current and voltage. As you may imagine, lots of noise can be transmitted across those data lines causing various levels of signal degradation at the receiving end (your external DAC).

Although optical outputs are galvanically isolated and therefore immune to many problems inherent which physical connections, a transceiver such as the TORX-170 has to convert the optical pulses into an electrical SP/DIF signal. Subsequently that SP/DIF signal would have its clock and L/R audio channel extracted and then routed to the „better“ DAC chip in I2S format.

Puuh…that’s a lot of stuff going on you say. Well, yes definitely. Of course these issues are negligible with a good design and probably not even audible unless the circuit design is total garbage to begin with.

Bottom line is that if you desire any kind of audible improvement, your external DAC needs to be vastly superior to anything built-in. Well-engineered smartphones such as the iPhone or Samsungs Galaxy series have long adopted modern 24-bit audio architectures. DAC chip manufacturers such as TI, Analog Devices or ESS Technology offer a wide range of DAC ICs for various application types. Their flagship products include the better known ESS9018 or the PCM1794 typically found in “audiophile” products.

But even the cheapest DAC chip rated for portable/mobile target applications does perform amazingly well when correctly used in a circuit design. If you think even further about that for a moment: companies like Apple or Samsung have virtually limitless budgets and the world’s best designers at their fingertips. Sure enough they’ll do their best to get the best quality out of their designs. Mobile DAC chipsets are at disadvantage though when it comes to driving high impedance headphones. Longer cable runs could also be a problem if you were to use your smartphone as a source. Mobile chipsets are designed with lower voltages and power efficiency in mind. There’s simply no need (or room) for a buffer and/or complex output stages. That’s where high-end DAC products differ as they are designed for stationary home use.

If you’d like to browse the variety of DAC chips currently offered by TI, feel free to browse their catalog. At the time of this writing, Texas offers 55 ICs. Mind-boggling, isn’t it?

Often there’s no need to hook up something to your smartphone. Most people would be better served with a more cabable headphone amplifier instead. I rarely see the DAC as the problem. It’s funny that sonic improvements are frequently attributed to the DAC chip whereas the audible changes are most likely caused by better amplification, better driving capabilities etc.

Don’t get me wrong. It is entirely possible to extract better performance from your iPhone or whatever smartphone you happen to own but you aren’t going to get this for cheap. Want proof? I attended a local Head-Fi meet last year where I brought my STAX headphones and the KGSSHV along. I didn’t want to haul my DAC so I just left home with my first-gen 9,7“ iPAD Pro and a quarter inch to RCA connector :) An exhibitor who owned an expensive NAIM DAC sampled my phones and asked where my DAC was. He literally fell off the floor when I revealed my iPAD which had no external digital-to-analog wizardry connected to it. Heck, I even used a dirt-cheap Amazon Basics cable connected to the STAX energizer. We also tried his NAIM DAC and while there was a small noticeable audible difference he was shocked how close a lowly tablet came to such an expensive piece of gear.

How much better, you ask? Well, let me put it this way – you’d still enjoy your vavorite music the same way and you’d probably forget the more expensive DAC if you were left with just the iPAD. The DAC gave slightly more resolution and realism but it’s not like you compare a grammophone to a reel-to-reel master tape. NAIM is a great company with excellent engineering. This just goes to show that you need to make giant leaps in gear investment to really feel like you’ve made an upgrade. And you certainly need a trained ear to appreciate those differences. Luckily, great companies from China such as Gustard make excellent and affordable products that are extremely well-engineered.

Granted, that was an extreme example. But let’s just say you use your gear on the road for casual listening or if you just want better audio quality, I’d be careful and test products before spending a single cent. You can easily spend 200 Euros or more and not notice any sonic difference! Audio critics are probably going to kill me for this statement. Believe me, it took me a while to dig out a few worthwile products that aren’t actually wasting your money.

Myth #3 „There’s a huge difference between cheap and expensive DACS“

Yes, there are noticeable differences. Differences aren’t only in the sonic department though. A well engineered DAC isnt’t cheap to make as it takes a skilled team of electrical engineers to get it right.


More money usually buys you better engineering and those incremental upgrades result in a DAC that is audibly better. Not because they use some magic potion. And there’s no single component responsible for all changes despite what manufacturers want to make you believe. An expensive DAC is potentially better shielded against electrical noise and its DAC chip performs closer to the manufacturers specs. Yes, you read that correctly. The same chip in a not well-executed circuit design will yield poor results.


For many listeners, flexibility and features are worth a premium. Expensive DACs frequently come with multiple inputs, allow you to play around with filter settings or test out sample rates. Need a remote control, too?
It’s nice having the ability to toggle between sources from your chair.

Replacing a Preamp

Digital volume control is great if you only listen to digital sources. For instance, my Gustard X20u does a great job of serving duties as a full-fledged preamp going directly into my Hypex based power amplifier. I did add a passive volume control though because I also own a turntable so I need to switch between both sources. But there’s even a solution for that. Mytek Brooklyn and RME ADI-2 DACs offer analog inputs in addition to digital ones. Adding a turntable is therefore no longer a problem (although your signal would get converted from analog to digital). If any of those features are benfitial in your setup, you may want to consider an expensive DAC. After all, “expensive” is relative.

Myth #4 „Device xyz Features a 24-bit DAC chip by xyz“

Everyone likes to advertise how great their product is. Nothing wrong with it. Just keep in mind that even the cheapest DAC chips (manufacturers like classifying them “automotive-grade”) have the capability to process word-lengths of 24 bits. Companies like TI, Analog Devices or ESS Technology offer different chips for various purposes. They differ mostly in signal-to-noise ratio, maximum dynamic ranges etc but these specs are meaningless in evaluation sound quality. If done right, the cheapest chip will easily outperform more expensive circuits. Plus it takes agiant leap in performance to beat the level of integration on a small piece of silicon. See also Myth #2.

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