MediaTek and Qualcomm dominate the Chinese phone chip market

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According to the latest forecast by Digitimes Research, a Taiwanese market research organization, in the first quarter of 2021, China’s smartphone application processor (AP) shipments will continue to be the same as the previous quarter. This means that the Chinese AP shipment will stay flat. In the fourth quarter of last year, Chinese smartphone manufacturers alone shipped about 211.6 million AP chips. A bulk of these chips are coming from two manufacturers – MediaTek and Qualcomm

The expectation was that with Huawei facing a ban, the orders will drop. However, this is not the case. It appears that brands such as Xiaomi, OPPO, and Vivo are effectively filling the voids that Huawei is leaving in the global market. This is most likely responsible for the increase in shipments year-on-year. 

MediaTek is the largest supplier in China’s smartphone AP market in the fourth quarter of 2020. The Taiwanese chipmaker accounts for 42.5% of the market share. Qualcomm follows closely with a market share of 41.5%. In third place is Huawei’s HiSilicon (Kirin) with 9.5% of the market. Analysts believe that in the first quarter of 2021, this ranking will remain the same. 

AP chips using the 12nm process accounts for 38.4% of China’s total shipments of smartphone AP chips. Digitimes Research predicts that in the first quarter of 2021, the total proportion of AP chips using the three processes of 6/7/8nm will exceed the proportion of 12nm.

Chinese firms will continue to increase chip orders

The orders for AP chips from Chinese manufacturers will not go down anytime soon. New manufacturer like Honor (no ties with Huawei) is building up its chip inventory. Other Chinese mobile phone brands are also placing their orders and this will maintain the high chip inventory levels. The current 7nm and 12nm wafer capacity is tight. This may be prompting smartphone companies to increase inventory.

Read Also:  MediaTek Dimensity 700 and 800 series coming soon, said to use older 10/12nm process

After the ban on Huawei by the U.S., the sales of brands such as Xiaomi, OPPO, and Vivo are increasing. This is one of the reasons why the media expects China’s smartphones and their components to increase in shipments.

While Chinese manufacturers are doing well in China, they still have a way to go globally. Huawei was on the brink of becoming the world’s largest smartphone maker before the U.S. ban. For other Chinese phone makers, beating the likes of Apple or Samsung will be an uphill task. However, predictions are that China’s mobile phone component shipments may continue to rise.

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Via: gizchina.com

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