On November 6th, leading IC design company, MediaTek, introduced the Dimensity 9300, its latest flagship mobile System-on-Chip (SoC) featuring an innovative All Big Core design.

It incorporates groundbreaking technology to redefine flagship experiences in areas such as on-device AI, gaming, and imaging. The first smartphones to adopt MediaTek’s Dimensity 9300 chip are expected to hit the market by the end of 2023.

MediaTek’s next generation APU 790 AI processor is integrated into the Dimensity 9300 and designed to significantly improve generative AI performance and energy efficiency for faster and more secure edge computing. The APU 790 doubles the integer and floating-point operations performance, while reducing power consumption by 45%.

The APU 790 hardware includes a generative AI engine, enabling faster and more secure edge AI computations. It’s capable of accelerating operations on Transformer models, achieving processing speeds eight times faster than the previous generation and generating images within one second.

Moreover, in conjunction with large-scale language models, MediaTek has developed mixed-precision INT4 quantization technology, which when combined with the company’s NeuroPilot memory hardware compression, can more efficiently utilize memory bandwidth and significantly reduce memory requirements for large AI models.

The APU 790 provides support for NeuroPilot Fusion, which can continuously perform LoRA low-rank adaptation, and is capable of supporting large language models with 1B, 7B, and 13B parameters, with scalability up to 33B.

Additionally, MediaTek’s AI development platform, NeuroPilot, has built a rich AI ecosystem, supporting mainstream AI language models such as Meta LIama 2, Baidu ERNIE Bot, and Baichuan’s large language model, facilitating rapid and efficient deployment of multi-modal generative AI applications on edge devices, offering innovative user experiences in text, images, music, and more.

In terms of performance, MediaTek emphasizes that the Dimensity 9300 offers exceptional performance in terms of intelligence, efficiency, and low power consumption, all achieved through groundbreaking advanced technology. It sets the stage for a new flagship experience in generative AI, gaming, and imaging.

“The Dimensity 9300 is MediaTek’s most powerful flagship chip yet, bringing a huge boost in raw computing power to flagship smartphones with our groundbreaking All Big Core design,” said Joe Chen, President at MediaTek.

“This unique architecture, combined with our upgraded on-chip AI Processing Unit, will usher in a new era of generative AI applications as developers push the limits with edge AI and hybrid AI computing capabilities.”

MediaTek’s Over 40% Market Share in China Underscores the Vital Importance of the Chinese Market

Furthermore, MediaTek strategically chose China as the launch location for its latest flagship mobile chip. This decision reflects the long-standing partnerships with various Chinese smartphone brands and the fact that the Chinese market has consistently been a significant source of revenue for MediaTek.

For the third quarter of this year, mobile chips constituted 49% of the overall revenue, making a substantial contribution to the company’s earnings. Regarding geographical distribution, foreign securities firms have estimated that the Chinese market contributes to approximately 40% of MediaTek’s revenue, primarily driven by smartphone products.

Moreover, according to statements made by MediaTek’s Chairman Rick Tsai at the beginning of this year, following the introduction of the Dimensity 5G mobile chip series in 2019, MediaTek expanded its presence in the Chinese high-end smartphone chip market. Starting almost from scratch in 2021, it achieved a market share of 20% in 2022. The projection is that this trend will continue to rise this year.

In other words, the Chinese mobile chip market, particularly in the high-priced flagship mobile chip segment, remains a critical driving force for MediaTek. It presents a significant long-term competition challenge to Qualcomm, particularly as it enters the realm of generative AI business applications.

After Huawei’s breakthrough in 5G chipsets, enabling its return to the market with 5G smartphones, the sales of smartphones using Qualcomm’s 4G chipsets are bound to be affected, which, in turn, poses a challenge for Qualcomm. With the introduction of the 5G Generative AI mobile chipset Tianji 9300, the competition in the Chinese smartphone chipset market is expected to intensify.

(Photo credit: MediaTek)

According to the news from ChinaTimes, Qualcomm announced on the 11th that it has reached a three-year agreement with Apple to supply 5G communication chips for Apple’s smartphones from 2024 to 2026. This also implies that Apple’s efforts to develop its own 5G modem chips may fall through, and the contract manufacturer TSMC stands to benefit the most.

Qualcomm did not disclose the value of this deal but mentioned that the terms of the agreement are similar to previous ones. Previous supply agreements have been highly profitable for Qualcomm but costly for Apple. According to UBS estimates from last month, Qualcomm’s sales of modem chips to Apple in the previous fiscal year amounted to $7.26 billion, accounting for approximately 16% of the company’s revenue.

This also highlights that Apple’s progress in developing modem chips may not be as expected, leading to a delay in their use in their flagship smartphones. Currently, Apple’s iPhones use 5G modem chips from Qualcomm.

Only a few companies worldwide have the capability to produce communication chips, including Qualcomm, MediaTek, and Samsung. In 2019, Apple acquired Intel’s smartphone modem business for $1 billion, along with 2,200 employees and a series of patents. Intel faced difficulties in developing 5G modem chips, resulting in annual losses of around $1 billion.

The market expects Apple to gradually reduce its reliance on third-party chip suppliers. Qualcomm originally estimated that by 2023, their 5G chips would make up only 20% of iPhones. However, Qualcomm’s CFO stated in November of the previous year that “most” of Apple’s phones in 2023 would contain their chips.

(Source: https://www.chinatimes.com/newspapers/20230912000097-260202?chdtv)

Owing to the impact of the COVID-19 pandemic, global smartphone production reached a mere 1.25 billion units in 2020, a record-breaking 11% YoY decrease, according to TrendForce’s latest investigations. The top six smartphone brands ranked by production volume for 2020, in order, are Samsung, Apple, Huawei, Xiaomi, OPPO, and Vivo. The most glaring change from the previous year is Huawei’s market share.

TrendForce indicates that Honor will formally separate from Huawei and operate as an independent smartphone maker at the start of 2021. The aim behind this spin-off is to ensure the survival of Honor, which has become a major brand in the global smartphone market after years of labor. However, it remains to be seen whether the “new” Honor can capture consumers’ attention without the support from Huawei. Also, Huawei and the new Honor will be directly competing against each other in the future, especially if the former is somehow freed from the U.S. trade sanctions at a later time. With the new Honor seeking to ramp up production, Huawei will have more difficulty in regaining market share for smartphones.

Looking ahead to the rest of 2021, TrendForce believes that the global smartphone market will gradually recover as people become accustomed to the “new normal” resulting from the pandemic. Moreover, this year will likely see a relatively strong wave of device replacement demand as well as demand growth in the emerging markets. Assuming that these conditions will materialize, the annual global smartphone production for 2021 is forecasted to increase by 9% to 1.36 billion units. Regarding the annual global ranking of smartphone brands for 2021, Huawei will experience a further and significant decline in its device production. This is because of the effects of the U.S. export restrictions and the spin-off of Honor as a separate entity operating in the smartphone market. Huawei is currently projected to tumble from third place in 2020 to seventh place in 2021. The top six for 2021, in order, will be Samsung, Apple, Xiaomi, OPPO, Vivo, and Transsion. Together, they will account for almost 80% of the global smartphone market. Nevertheless, the pandemic will remain the central variable (or the biggest uncertainty) in the production projection because it will continue to exert significant influence on the global economy. Besides the pandemic, the performance of smartphone brands during 2021 could also be affected by geopolitical instabilities and the lack of available production capacity in the semiconductor foundry market.

Penetration rate of 5G smartphones is likely to rise to 37% in 2021, while production will still be constrained by limited foundry capacities

Thanks to the Chinese government’s aggressive push for 5G commercialization in 2020, global 5G smartphone production for the year reached about 240 million units, a 19% penetration rate, with Chinese brands accounting for almost a 60% market share. While 5G will remain a major topic in the smartphone market this year, various countries will also resume their 5G infrastructure build-out, and mobile processor manufacturers will continue to release entry-level and mid-range 5G chips. As such, the penetration rate of 5G smartphones is expected to undergo a rapid increase to 37% in 2021, for a yearly production of about 500 million units.

It should be noted that, under the optimistic assumption that the pandemic can be resolved within the year, shipment for various end-products, including servers, smartphones, and notebook computers, will undergo a YoY increase compared to 2020. Case in point, the number of PMICs and CIS (CMOS image sensors) contained per handset will each double in order to meet increased smartphone specifications. On the other hand, major Chinese foundry SMIC has recently been added to the Entity List once again. This is expected to exacerbate the foundry industry’s already-strained production capacity.

TrendForce indicates that smartphone brands’ recent bullish outlook towards the 2021 market and their attempt to secure more semiconductor supplies by increasing their smartphone production targets can potentially lead these brands to overbook certain components at foundries. However, smartphone brands may adjust their component inventories from 2Q21 to 3Q21 and reduce their semiconductor procurement activities if actual sales performances fall short of expectations, or if component bottlenecks remain unresolved, leading to a widening inventory gap between bottlenecked and non-bottlenecked parts. Even so, TrendForce still forecasts an above-90% capacity utilization rate for foundries in 2021.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com