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MediaTek entered the mid-to-high-end market with the Dimensity 1000 chip, surpassing Qualcomm and taking the first place

In the mobile phone chip industry, MediaTek has ranked second for many years, just because there is an insurmountable mountain ahead, that is Qualcomm.

Of course, this does not mean that MediaTek does not have the strength to win the first place. As we all know, MediaTek has risen rapidly because of its turnkey chip solutions, but it has also been limited to the low-end market. Fortunately, MediaTek did not fail because of this, but instead focused on the research and development of mid-to-high-end mobile phone chips. This time, MediaTek finally entered the mid-to-high-end market with the Dimensity 1000 chip, and surpassed Qualcomm with a huge shipment volume in the third quarter!

Beyond Qualcomm, MediaTek is No. 1

On December 25, the market research firm CounterPoint Research released the global smartphone chip market share report for the third quarter of 2020.

MediaTek entered the mid-to-high-end market with the Dimensity 1000 chip, surpassing Qualcomm and taking the first place

Image credit: CounterPoint Research

The report shows that in the third quarter of this year, Qualcomm’s market share was 29%, MediaTek’s 31%, HiSilicon, Samsung, and Apple’s market share were 12%, and Ziguang Zhanrui was 4%. MediaTek surpassed Qualcomm’s 29% with a market share of 31%, taking the first place in the global smartphone chip market in one fell swoop.

Looking at the situation in each region, MediaTek’s shares in India, Latin America, and the Middle East and Africa (EMA) reached 46%, 39%, and 41%, respectively, showing significant progress.

Image credit: CounterPoint Research

In addition, the report also pointed out that the main factor behind MediaTek’s victory this time was the rapid recovery of smartphone sales in the third quarter, while MediaTek’s sales in the mid-to-low-end smartphones in the $100-$250 price range were very strong, making the Its market share in key regions such as China and India has greatly increased, so MediaTek has successfully become the largest smartphone chipset supplier.

Huawei assists, Xiaomi buys wildly

MediaTek won the first overall market share, and the U.S. order to limit “chips” can be said to have contributed.

Since the United States included Huawei in the entity list, Huawei is currently unable to find a foundry to help itself produce Kirin chips, and can only start to use chips produced by MediaTek on a large scale. Not only some models of the Nova series and some models of the Changxiang series in offline channels, but even the Honor X series models before the cut use MediaTek chips. Before the supply was cut off, MediaTek also supplied about 13 million mobile phone chips to Huawei.

Of course, it is not just Huawei that helped MediaTek reach the top, but also Xiaomi.

According to researcher Dale Gai, MediaTek ended up winning over leading OEMs such as Samsung, Xiaomi and Honor because of the US ban.

At the same time, major domestic mobile phone manufacturers such as Xiaomi, oppo, and vivo also smelled the danger. They deliberately reduced their dependence on Qualcomm chips and joined the MediaTek team again. Take Xiaomi as an example, compared with the same period last year, the shipment share of MediaTek chipsets to Xiaomi has more than tripled.

The 5G chip market has huge development potential

According to Statista data, the global 5G chip market size in 2019 was US$1.03 billion. The market size is expected to reach US$14.53 billion by 2025, with a compound annual growth rate of more than 55% from 2019 to 2025. Judging from the growth rate of the 5G chip market in various regions of the world, the Asia-Pacific region will be the main driving force for the growth of the global market in the next five years, while the United States and Europe currently lead countries in 5G chip development.

Although in terms of overall market share, Qualcomm has temporarily been surpassed. However, in the 5G chip market, Qualcomm is still the world’s largest 5G chipset manufacturer in the third quarter of this year, accounting for as high as 39%, with an absolute advantage. And, according to media reports, Qualcomm’s 5G chip market share would have been even higher if it weren’t for the fact that one of Qualcomm’s customers delayed the release of their flagship mobile phone and affected the sales of 5G mobile phones.

With the continuous popularity of 5G mobile phones, 5G chip shipments have increased sharply, which may become the next outlet. 5G phone sales doubled in the third quarter of 2020.

According to CounterPoint Research, 5G mobile phone shipments in the fourth quarter can account for 33% of the overall shipments, while the current 5G mobile phone shipments account for only 17%.

However, the current top priority of chip manufacturers is to popularize 5G, which will lead to a great increase in the utilization rate of 5G chips. Therefore, it is very likely that Qualcomm will reach the top again in the fourth quarter.

Although 5G chips may help Qualcomm turn the tide in the future, it also makes it worry. At present, MediaTek is also using 5G chips to eliminate the low-end image that has plagued itself for a long time, and gradually enter the mid-to-high-end market, which will also pose a huge threat to Qualcomm’s 5G chip market in the future.

Continuous mergers and acquisitions, active layout

In terms of industrial layout, MediaTek has also made frequent moves recently.

According to the Economic Daily, MediaTek announced that its subsidiary Luoda will spend about NT$150 million to acquire 100% of Jiuyang. In this regard, MediaTek said that this time is to expand the broadband communication market and further improve the competitiveness of the market.

It is reported that Jiuyang has three product lines, namely 10/100 Mbps, Gigabit Ethernet transceivers and switches, and intelligent network power supply (PoE) chips. Its main customers are Mingtai, TP-LINK and Tenda, and its competitors are Broadcom. , Luoda and Realtek and other IC design companies. And Jiuyang’s application fields are also very wide, spanning security, industry, smart grid and small and medium-sized enterprises, etc., but Ethernet IC is the main source of revenue, accounting for 99.81% of total revenue.

It is worth noting that this is MediaTek’s third merger this year. MediaTek also acquired Intel’s Enpirion power management IC division and network chip maker AsiaInfo. Among them, the acquisition of Intel’s Enpirion power management IC division cost US$85 million, and the acquisition of AsiaInfo cost NT$495 million.

It is not difficult to see from the above three mergers and acquisitions that MediaTek is targeting power management ICs and network communication chips for expansion, and plans to focus on the layout of production lines. Especially after SMIC was blocked in the United States, Qualcomm’s power management IC production has encountered obstacles. MediaTek also intends to seize the opportunity to seize the power management IC market share and strive for further “curve overtaking”.

Although MediaTek took advantage of the U.S. “chip” limit to seize the mobile phone chip market, it is still a difficult problem to maintain the number one position.

At present, with the release of the iPhone 12, Apple and its old rival Qualcomm have resumed cooperation on baseband, and the sales of the iPhone 12 series are increasing day by day, so Qualcomm’s market share is bound to usher in a substantial increase in the fourth quarter. In addition, Qualcomm has also obtained a license for 4G chips and can sell 4G processors to Huawei, and Honor has also decided to use Qualcomm chips.

Whether MediaTek can maintain its number one position in the next quarter also depends on the performance of its own chips. If it can continue to be recognized by the market, MediaTek and Qualcomm will still have a fierce battle on the battlefield in the next quarter.

Who will kill the deer is still unknown!

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