MediaTek may be biting at Qualcomm’s 4G heels, but so far the US vendor, despite its problems in China, is still growing its share with the country’s vendors.
Qualcomm has acted aggressively in the past year to pack functionality into 4G system on chip (SoC) products for low-cost smartphones and this has paid off. According to Will Strauss of chip analyst firm Forward Concepts: “Qualcomm’s chips are now doing quite well in the inexpensive smartphone market with fast-rising China-based companies like Xiaomi and Vivo. Although their China-specific smartphones also employ modem chips from other vendors (like Spreadtrum and Innofidei), the devices for 4G or for the West tend to favor Qualcomm.”
Now MediaTek is fighting back with a series of LTE announcements. Last week it promised an accelerated pace of chip launches compared to 3G, especially for China itself.
Speaking on the company’s third quarter earnings call, president Ching-Jiang Hsieh said MediaTek will attack Qualcomm’s lead in Chinese 4G with the launch of a new octacore processor/modem combination in the first quarter of 2015. It is now sampling the 64-bit MT6795 eight-core SoC, and it plans to double its output of LTE chips from 10% of total production in the third quarter this year to 20% during the fourth quarter.
The company also recently unveiled the MT6735, a 64-bit four-core LTE chip with worldmode modem support, positioned directly against Qualcomm’s recently announced Snapdragon 210 for lower cost smartphones, while the MT6795 takes on the Qualcomm 600-800 Snapdragon models.
MediaTek said it is on track to ship more than 350m smartphone chips this year, among which more than 30m will be support LTE. In Q414, it expects to ship 90 million to 100 million smartphone chips and about 40 million chips for tablets. In the third quarter, it posted consolidated net income of NT$13.3bn ($440 million), up 58% year-on-year.
It is already the market leader in 3G in China and that country’s consumption of mobile phone processors is set to reach 120 million units this year. Credit Suisse estimates that Qualcomm has about half of that market, followed by MediaTek with about 25%, then Spreadtrum on 5%, and some smaller players like Marvell Technology and Intel. Intel has been taking stakes in Chinese partners, including Spreadtrum, to improve its position next year.
This article originally appeared in Rethink’s Wireless Watch newsletter