The latest tablet processor is about to be shipped.
According to reports, MediaTek has once again successfully snatched orders from Qualcomm, securing the order for Samsung's new flagship tablet processor, which is expected to be released as soon as October. This is the first time MediaTek has entered the supply chain of Samsung's flagship mobile devices.
MediaTek has always refrained from responding to market rumors. Institutional investors are optimistic that the high unit price of flagship products will not only boost subsequent shipments but also help improve profitability for MediaTek after securing the new order from Samsung.
The Korean Economic Daily reported that Samsung's high-end tablets have mainly been equipped with Qualcomm Snapdragon series chips so far. Now, Samsung is turning to cooperate with MediaTek, not only because it is optimistic about MediaTek's technological progress but also with the intention of drawing MediaTek to become its wafer foundry business customer. At the same time, it is also an attempt to gain bargaining chips for future negotiations with Qualcomm.
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The report points out that Samsung's new flagship tablet, the Galaxy Tab S10, which is expected to be unveiled as early as October, will use MediaTek's flagship chip, the Tianyi 9300+, replacing Qualcomm's Snapdragon series. According to statistics, the global tablet shipments in the first quarter of this year increased by 0.5% year-on-year, with a total of 30.8 million units. Samsung's market share is second only to Apple, with shipments of 6.7 million units, a year-on-year decrease of 5.8%.
Previously, Samsung has also cooperated with MediaTek, using MediaTek chips in its non-flagship A series and M series mobile phones, and introducing MediaTek products into mid-to-low-end tablets. MediaTek has taken a share of many orders that should have been obtained by Qualcomm. However, Samsung has never cooperated with MediaTek in flagship terminal devices. If the Galaxy Tab S10 adopts MediaTek's Tianyi 9300 chip, it will be the first time Samsung has used MediaTek chips in its flagship tablet products.
The report points out that MediaTek's Tianyi 9300+ is built using TSMC's 4nm process, the same as Qualcomm's Snapdragon 8 Gen 3. However, MediaTek's products perform better than Qualcomm's and are 10% cheaper, which is one of the main reasons Samsung chose the Tianyi 9300+ instead of the Snapdragon. Looking at last year, processors accounted for about 18.1% of the manufacturing cost of Samsung's smartphones, higher than the 12.8% in 2022, indicating that over-reliance on Qualcomm has led to an increase in Samsung's costs.Industry analysis suggests that MediaTek's Tianji 9300+ is a powerful performer, having been adopted by major Chinese smartphone brands such as vivo and Xiaomi. This new chip is expected to be integrated into Samsung's flagship tablets, which could boost MediaTek's operations as its penetration rate increases and also add momentum to TSMC's advanced process order book.
MediaTek pointed out at a recent earnings call that, due to the ongoing transition from 4G to 5G and the trend towards high-end smartphones, it anticipates low single-digit growth in the global smartphone market this year. For MediaTek specifically, its strong expansion in the flagship smartphone market and the higher average price of its flagship smartphone chips are positive indicators that its 2024 mobile revenue growth could exceed 15% to 17%.
Surpassing Qualcomm, MediaTek Becomes the New Leader in the Smartphone Chip Market
According to the latest report released by the market research firm Omdia, the global 5G smartphone market saw significant changes in the first quarter of 2024. MediaTek, with its strong performance in the under-$250 segment, has become the leader in the global 5G smartphone processor market with a 29.2% market share, an increase of 6.4 percentage points year-on-year. Qualcomm follows closely with a 26.5% share, ranking second. Other manufacturers such as Apple, Samsung, Google, Huawei, and Spreadtrum collectively hold a 17% market share.
In terms of specific shipment volumes, MediaTek's 5G smartphones saw a significant increase in shipments from 34.7 million units in the same period last year to 53 million units in the first quarter of 2024, a year-on-year increase of 53%. In contrast, Qualcomm's Snapdragon chip-based 5G smartphones saw a modest increase in shipments from 47.2 million units to 48.3 million units, but its market share dropped from 31.2% to 26.5%.
Samsung, with its Galaxy S24 series, has significantly increased the shipment volume of its Exynos processors, achieving a market share of about 7%. Huawei's HiSilicon Kirin chips have also seen their market share rise to around 4% due to the popularity of the Mate 60 series and Nova 12 series.
Omdia's analysis points out that MediaTek's ability to surpass Qualcomm in the 5G smartphone processor market is mainly due to its dominant position in the under-$250 market segment. Data shows that shipments of 5G smartphones under $250 in the first quarter of 2024 increased from 38.7 million units in the same period of 2023 to 62.8 million units, a 62% increase. This is a significant positive for MediaTek.
Although it did not rank in the top two in terms of overall market share, Apple still dominates the high-end smartphone market. Its strong brand influence and technological innovation have allowed Apple to maintain a solid competitive edge in the high-end market.
In the past three years, most processor manufacturers have shifted from 4G to 5G technology, and China's Spreadtrum has seized this transformation opportunity to expand its shipment share in the declining 4G processor market. Today, Spreadtrum has become the main competitor to MediaTek in the 4G smartphone processor field.Manufacturers such as Samsung, Apple, and Qualcomm are fully committed to developing 5G technology, significantly reducing the shipment of 4G smartphone processors. For instance, Samsung's shipment ratio of 4G processors in the first quarter of 2024 was only 1%. In contrast, MediaTek continues to maintain a large production of 4G processors, with a shipment ratio exceeding 50%.
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