On Thursday, chipmaker MediaTek Inc (2454. TW) unveiled a new 5G smartphone chip that it believes would be used in high-end Android phones, a market that Qualcomm Inc (QCOM.O) now controls.
The Hsinchu, Taiwan-based business announced that their new Dimensity 9000 chip will be the first in the world to adopt Taiwan Semiconductor Manufacturing Co’s (2330. TW) “N4” chipmaking process, which allows for smaller and quicker devices. It will also be the first smartphone chip to use Arm Ltd’s powerful new Cortex X2 computing engine, according to MediaTek.
MediaTek is one of only three companies in the world that develops 5G smartphone chips, with Qualcomm and Samsung Electronics Co Ltd (005930. KS). Sanctions forced the fourth big participant out of the market: Huawei Technologies Co Ltd (HWT.UL), which also developed its own phones.
Following Huawei’s exit, Android smartphone producers have been scrambling to fill the void left by the Chinese company. Many of the candidates for that market share are already customers of MediaTek, including Xiaomi Corp (1810. HK), Oppo, and Vivo, but many of those companies use MediaTek for low and mid-tier handsets and rely on Qualcomm for higher-end models.
MediaTek hit $10 billion in revenue for the first time last year, and Ku said it expects to hit $17 billion in revenue this year. He said that while 4G smartphone chips sometimes sold for $10, 5G chips can sell for $30 to even $50.
“The No. 1 driving factor is really the much higher (average selling price) due to the 4G to 5G transition,” Ku said.
