Smartphone chip shipments increased by 11 times in one year

In the global semiconductor industry this year, 7 of the top 10 manufacturers all showed negative growth, and only Qualcomm (NASDAQ: QCOM) grew faster than double digits.

According to the latest figures released by consulting firm iSuppli, this year, Qualcomm’s semiconductor revenue will reach US$13 billion, a significant increase of 27.2% from last year’s US$10.2 billion, ranking third in the world. According to the closing price on Dec. 12, Qualcomm’s market value was US$108.2 billion, exceeding Intel’s (NASDAQ:INTC), which is more than four times the size of its revenue. Intel’s revenue was 47.5 billion U.S. dollars, with a market value of 102.8 billion U.S. dollars.

Qualcomm's big win is thanks to the era of mobile Internet. In smart phones, "Intel Inside" is currently only a slogan, and Qualcomm's chips are almost everywhere.

However, in mainland China, the world's largest smartphone market, Qualcomm has been surpassed by MediaTek (2454:TW). According to figures released by Lufthansa General Manager of China MediaTek China on December 12 when interviewed by this reporter, China’s smart phone shipments were approximately 180 million units this year, of which approximately 110 million were using MediaTek’s chips, and their market share exceeded. Sixty percent. In comparison, Qualcomm shipped 60 million units.

In 2011, MediaTek only sold 10 million smart phone chips in mainland China. From 10 million to 110 million yuan, 11 times growth, why did MediaTek reverse?

11 times the reversal of MediaTek in the era of smart machines, successfully continued its pioneering chip "turnkey" mode in the era of functional machines.

The 11-fold increase in one year, even beyond MediaTek’s own expectations, is evident in its constantly updated annual forecast.

At the beginning of this year, MediaTek announced that its annual smart phone chip shipments were 60 million units, which is a very bold estimate compared to the base number of 10 million units in the previous year. However, by the middle of the year, with the sale of MT6573 and MT6575 two chips, MediaTek quickly raised its forecast for the full year to 95 million. However, by the end of the year, this figure was revised again to see as high as 110 million.

Corresponding to the constant refreshment of shipments, the market once took MediaTek chips "hard to make." In July and August of this year, an official MediaTek chip with a quote price of around US$15 was once raised to more than US$30. Many small and medium mobile phone manufacturers complained that they could not get the goods. Although the “broken speculation” exposed MediaTek’s loopholes in production and sales forecasting and channel management, it also illustrated the popularity of its products.

A person from a well-known mobile phone solution firm in Shanghai believes that the soaring sales of MediaTek chips have been largely due to the fact that it has seized upon the Chinese boom in the thousands of smartphones. After China entered the 3G era, the three major operators have rapidly expanded the scale of their users, and have been involved in the mobile terminal segment. They have vigorously developed the 1,000-yuan smart machine through the use of mobile phones to collect and subsidize terminal manufacturers.

According to the monitoring data released by Aimei Consulting, in the third quarter of this year, smartphones between 1,000 and 2,000 yuan accounted for 45.2% of the total market, and sales of smartphones under 1,000 yuan reached 33.7%. The addition of the two means that there are about 80% of the Chinese smart phone market, and the price is below 2,000 yuan, which occupies an absolute mainstream.

And below 2000 yuan is the main market segment of MediaTek chips. In the case of MT6575, a smart phone chip that MediaTek released in March this year, one of the first handsets introduced by Zop, a Shenzhen cell phone manufacturer using the chip, has a naked-eye 3D function, which was priced at 1599 yuan, and companies such as LG had previously launched it. Similar configuration models cost more than 3,000 yuan. Three months later, the price of smartphones equipped with MediaTek MT6575 has dropped to around 900 yuan.

"Mobile phone manufacturers have a relatively small profit on the thousand yuan smart phone, and are very sensitive to the cost of the chip platform." The mobile phone solution providers told reporters that, in absolute terms, sometimes the price of Qualcomm chips may be lower than MediaTek, but overall The price advantage is MediaTek's advantage.

"All along, the logic of the 1,000-yuan smart machine market is that the price can be low, but the configuration must not be low," the source said.

In addition to the cost of the chip itself, manufacturers also need to consider the supporting R&D costs. MediaTek's turnkey solution is very attractive to handset manufacturers.

"Take an analogy, MediaTek's chips are like hardcover rooms, and owners can put in a few clothes and they can live in." A domestic mobile marketing leader told reporters that MediaTek has successfully continued its history in the era of functional machines in the era of smart machines. Chip "turnkey" mode.

In addition to processors and baseband chips, MediaTek's chip platform also integrates functional modules such as Wi-Fi (wireless transmission), GPS (positioning), FM (radio), Bluetooth, and even applications. In the fast-changing market, this can help mobile phone manufacturers quickly introduce products and seize market opportunities. At the same time, the highly integrated nature of MediaTek chips reduces the difficulty of subsequent development of mobile phone manufacturers and the input of engineers in product development and testing.

Qualcomm's gap in QRD surviving Qualcomm's QRD is not yet thorough enough. The software optimization and Bug (bug) processing have not yet fully completed. The responsible person of the above-mentioned domestic mobile phone manufacturers believes that if Mediatek's chip is finely decorated, it will be the main competitor. Qualcomm offers rough rooms. After the mobile phone manufacturers get the chips, they also need to ask “electricians” and “muddy water workers”. This will increase the investment of engineers, and on the other hand it will delay the development cycle of the products.

Therefore, relatively speaking, Qualcomm's chips are more suitable for large manufacturers, they have more strength for secondary development, and MediaTek is more attractive to small and medium-sized manufacturers. For mobile phone manufacturers, secondary development increases R&D investment, but also gives them more room to add their own unique features and applications, helping manufacturers to find differentiation in the stereotyped competition in the Red Sea.

In fact, from the perspective of customer distribution, Qualcomm still maintains a dominant position in the mid-to-high-end market, and has entered Apple's iPhone and high-end models of many manufacturers. The main site of MediaTek is still limited to the mid-to-low end.

Of course, Qualcomm does not stand idly by in the face of a market that accounts for up to 80% of the 2000 yuan.

At the end of last year, Qualcomm also aimed at China's 1000-yuan smart machine market and adopted a similar "link-key" model from MediaTek to launch the third-generation reference design platform (Qld). Data disclosed by Qualcomm in June of this year shows that there are more than 30 mobile phone manufacturers that joined the QRD program, and 17 vendors have launched smart terminals based on the QRD platform.

“Qualcomm has set up a QRD center in Shanghai and has hundreds of engineers.” A CEO of a new mobile phone brand told reporters that QRD means that Qualcomm has been aggressive in the low-end market and has relinquished its previous high-level attitude. Qualcomm QRD not only provides a pre-testing and optimization platform for mobile phone manufacturers, but also covers various hardware, software and applications that meet the basic functions of smartphones, such as memory, sensors, touch screens, cameras, display screens, radio and browsers, and maps. Mail, music, etc.

However, a planner who is both a Qualcomm platform and a MediaTek platform told reporters that Qualcomm's QRD has not been thoroughly implemented and that software optimization and Bug (bug) processing have not yet been fully implemented. "Although it is no longer a rough room, it is still minimally installed." The person said vividly.

He believes that this is related to Qualcomm’s investment in resources, cultural differences, and localization. “From the results, the maturity of Qualcomm's QRD solution is not as good as that of MediaTek, and service support and response time are not comparable to MediaTek.” .

Lui Xiangzheng, General Manager of MediaTek China, revealed to reporters that MediaTek currently has 8 R&D centers in mainland China, service support teams in Shanghai and Shenzhen, more than 100 teams in Shanghai, and more than 900 teams in Shenzhen. Will continue to increase.

The subtle structure of Lu Xiangzheng also admits that Spreadtrum is a "respectable" rival Lu Xiangzheng told reporters that based on this year's market share of about 60% in mainland China, MediaTek hopes to continue to increase its market share next year.

For the MediaTek Branch, which had missed the opportunity due to the slow deployment of the smart phone market, the current results can be reversed. In the first 11 months of this year, MediaTek achieved NT$91,678 million in revenue, including monthly revenues in September and October of more than NT$10 billion. According to the current situation, this year is expected to re-establish thousands of orders. The threshold of NT$100 million.

Historically, MediaTek had recorded NT$115.5 billion in revenue and NT$113.5 billion in revenue in 2009 and 2010 respectively. Since then, the company has experienced price competition due to the maturity of feature chips from mainland companies such as Spreadtrum and mobile phones. The market switched from a feature machine to a smart machine, which met with the period of “the hardest” as the chairman of MediaTek, Mr. Cai Mingjie.

“MediaTek does have the upper hand this year, but the mobile phone market is changing too fast, and there will be changes in the market trend and pattern next year.” The above mobile phone planners believe that “Although Qualcomm’s QRD is now almost a bit, but it is slowly improving. Who knows in the future? What?"

To a large extent, this is also related to Qualcomm's strategy. For example, how large is the continuous investment in QRD next year, whether the QRD solution can be perfected, whether the price will have advantages, and so on.

To increase the time even further, the follow-up speed of mainland manufacturers such as Spreadtrum is another important variable in the market pattern game. At present, Spreadtrum has a first-mover advantage in the TD chip market compared to MediaTek and Qualcomm, but in the WCDMA market, due to the constraints of overall design capabilities, it is still unable to compare with MediaTek and Qualcomm in terms of product launch speed and stability.

However, Lu Xiangzheng also admitted that Spreadtrum is a "respectable" opponent. "If the follower's technology is up, no problem with the product, and then the use of price war means will certainly take away part of the market."

This scene has actually been staged in the era of functional machines. Spreadtrum’s feature chips have matured in 2009, eroding MediaTek’s once-to-seven percent market share. MediaTek’s follow-up to the price war will hurt its profitability as a market leader.

"Compared with the functional machine, the technical content of the smart machine chip is much higher. We must consider Wi-Fi, GPS and other functional modules. We must also compare the number of tests and the evolution of the standard. We do not know the internal resources of them. To what extent," said Lu Xiangzheng.