Do android phones have hardware chips for encryption? If it's software only, then what is the performance/battery impact?
The Android Open Source Project has a entire section on Security:

https://source.android.com/security/

As you asking about encryption the minimum standard for devices with Google Play services is defined by the Android Compatibility Definition Document:

https://source.android.com/compatibility/8.0/android-8.0-cdd#9_9_data_storage_encryption

While there doesn't appear to be any hardware mandates there, once you get to Keystore related items:

https://source.android.com/compatibility/8.0/android-8.0-cdd#9_11_keys_and_credentials

Provided solutions include Trusty which a separate microprocessor or virtualized instance separated from the rest of the Android OS and only accessible via a Hardware Abstraction Layer (HAL).

With regards to Full Disk/File Encryption, see:

https://source.android.com/security/encryption/full-disk