China Taiwan MediaTek Co., Ltd. (MediaTek.Inc) is a world-renowned IC design manufacturer, focusing on wireless communication and digital multimedia and other technical fields. It provides chip integrated system solutions, including wireless communications, high-definition digital TV, optical storage, DVD and Blu-ray and other related products. Founded in 1997, MediaTek is publicly listed on the Taiwan Stock Exchange in Taiwan. Headquartered in Taiwan, China, and has sales or R&D teams in mainland China, India, the United States, Japan, South Korea, Singapore, Denmark, the United Kingdom, Sweden and the United Arab Emirates and other countries and regions. In 2016, MediaTek’s operating income reached NT$275.51 billion (about US$8.6 billion), a year-on-year increase of 29.2%. Analysts believe that this achievement is mainly due to the excellent performance of domestic mobile phones, while MediaTek has also expanded its share in the smartphone chip market.
In the field of mobile chips, Qualcomm occupies a considerable market. This situation occurs, on the one hand, because Qualcomm holds a large number of 3/4G network patents, and mobile phone manufacturers cannot bypass Qualcomm in terms of communication. On the other hand, the reason is that Qualcomm chips are positioned as high-end chips, and their performance is better than that of MediaTek and Huawei processors.
According to Bloomberg News on June 11, MediaTek’s revenue in May was NT$41.326 billion (about 9.546 billion yuan), an increase of 13% month-on-month and an astonishing 89.76% year-on-year growth. After March this year, it stood on the 400th again. The NT$100 million mark also hit a record high.
In addition, although MediaTek was dragged down by packaging and testing foundry partners, its revenue in June may be affected, but its revenue target for the second quarter and the whole year remains unchanged. MediaTek expects revenue in the second quarter to increase by 10%-18% year-on-year to NT$118.8-127.5 billion.
It is learned that according to the latest data released by the research institute Counterpoint, the market share of MediaTek SoC in the global smartphone SoC market in the first quarter of this year was as high as 35%, and it has beat Qualcomm for three consecutive quarters, ranking first in the world.
In addition, MediaTek also plans to launch the first flagship new product based on the Armv9 architecture by the end of this year, and will also launch Sub 6 and millimeter wave solutions. These new technologies and products will provide new momentum for MediaTek’s business revenue.
In the field of mobile chips, Qualcomm has occupied most of the market, and it has steadily occupied the high-end market. It is reported that the reason why Qualcomm has been able to win most of the mobile chip market is because Qualcomm chips are positioned as high-end, and high-end manufacturers such as Huawei, Samsung, and Apple all use Qualcomm chips. If other manufacturers want to enter the high-end market, they cannot leave the Qualcomm Snapdragon 8 series chips. On the other hand, because Qualcomm holds most of the 3/4G network patents and almost all CDMA network patents, many mobile phone manufacturers have to use Qualcomm chips.
Due to the prevalence of Qualcomm chips, MediaTek’s mobile chips are almost on the verge of losing money. But what I didn’t expect is that after entering the 5G era, the situation has changed.
In terms of 5G dual-mode chips, Huawei is the first, followed by Samsung, MediaTek, and Qualcomm. Finally, because MediaTek launched a 5G dual-mode chip earlier than Qualcomm, and the 5G dual-mode chip is built into the processor, it has successfully built a high-end Dimensity series of chips.
As a result, the MediaTek Dimensity 5G series chips were very popular, and Xiaomi, OPPO, and VIVO launched mid-to-high-end mobile phones based on the MediaTek 5G chips, which caused the Qualcomm 7 series 5G chips to be cold.
However, after entering the 5G era, the chip market situation has changed. With the blessing of 5G technology advantages, Huawei chips are a blockbuster in the market. The MediaTek Dimensity series quickly seized the Qualcomm market through quantitative advantages.
Although the Kirin processor was sanctioned and finally had no choice but to give up its share, Huawei’s experience also prevented domestic mobile phone manufacturers from putting eggs in one basket.
Since last year, manufacturers such as Xiaomi, OPPO, and VIVO have built mid-to-high-end mobile phones based on MediaTek’s 5G chips, resulting in a sharp drop in Qualcomm’s processor share. In the end, MediaTek surpassed Qualcomm for the first time in 2020 to become the world’s largest mobile phone chip manufacturer. Recently, good news came from MediaTek again. Its May revenue hit a new high, with a monthly revenue of NT$41.3 billion. Not surprisingly, MediaTek will still surpass Qualcomm in the second quarter of this year, ranking first in the world.
MediaTek has achieved this result, and Qualcomm is the most unpleasant in my heart. It is understood that MediaTek has repeatedly broken through itself in terms of revenue, thanks to the support of domestic mobile phone manufacturers.
Relevant data shows that after entering 2021, the sales of domestic mobile phone manufacturers have soared. Among them, OPPO’s sales in the first quarter increased by 65% year-on-year, Xiaomi increased by 75% year-on-year, and VIVO increased by 79% year-on-year, all of which brought a large number of orders to MediaTek.
In 2021, the 5G replacement wave in the smartphone market will come in great strides, and the competition for 5G mobile chips will become increasingly fierce. It is reported that Qualcomm has prepared a large number of mid-range 5G mobile chips in the second half of the year, and is about to regain the market occupied by MediaTek. The stock of 6nm chips alone will reach 60 million. MediaTek is naturally unwilling to be weak, and recently released a new 5G mobile chip – Dimensity 900.
The product is manufactured based on the 6nm advanced process and supports 5G dual full Netcom and Wi-Fi 6 connections, filling the market gap after the Dimensity 1200/1100 was released in January this year. In the second half of last year, MediaTek’s market share showed explosive growth, rising to 31.7%, becoming the largest smartphone processor manufacturer in China’s domestic market for the first time. The market competition among 5G mobile chips is developing from high-end to mid-end, and even the whole product series.
In 2021, the 5G replacement wave in the smartphone market is coming. It is predicted that the shipment volume in 2021 is expected to reach more than 600 million units. In March 2021, the number of 5G mobile phone terminal users in China will reach 285 million. This makes the 5G mobile chip market increasingly competitive. Statistics from CINNO Research show that in the second half of 2020, MediaTek’s market share showed explosive growth, rising to 31.7%, making it the largest smartphone processor manufacturer in China’s domestic market for the first time.
Now that it has won the first place in chip shipments, MediaTek certainly hopes to completely secure this position. Therefore, consolidating the mid-end market and fighting for the high-end market will become the focus of MediaTek’s development for a period of time in the future.
In addition, MediaTek also announced that it is on track to meet its preliminary sales growth forecast for the second quarter of this year, which is 10% to 18% over the same period last year. Additionally, the company announced that it is working closely with its back-end partners, and it will also meet its full-year sales growth and gross margin guidance expectations. Previously, the fabless chip maker had estimated that its revenue would rise more than 40% this year, with gross margins ranging from 44% to 46%.