Published in Processors

MediaTek might get into price war with Qualcomm

by on15 August 2017


Pressure is high


Now that Qualcomm is lowering prices for its Snapdragon 450 chips to less than US$10.50, MediaTek is under pressure to follow suit for its Helio P23 series.

Digitimes claims that MediaTek will try to flog its Helio P23 chips at as low as less than US$10 to better compete with Qualcomm.

For those who came in late, Qualcomm cut prices for its Snapdragon 450 series introduced in June.

Built using 14nm process technology, the Qualcomm Snapdragon 450 is expected to bring more competition in the already competitive midrange and lower midrange mobile chip market segment.

Samsung uses 14nm process technology to fabricate Qualcomm's Snapdragon 450 chips, has apparently offered US$2,500 per wafer enabling Qualcomm to lower the chip prices.

MediaTek contracts TSMC to manufacture its upcoming Helio P23 chips and has to pay the foundry more than US$3,500 for the cost of 16nm per wafer, the sources said.

MediaTek originally wanted the Helio P23 to sell for $15. However, the prices have recently been cut to $11-12 as the outfit vied for Chinese clients.

The Helio P23 series will appear in the fourth quarter of 2017, with target shipments for the chips of 5-6 million units monthly. The upcoming Helio P23 chips have obtained orders from Oppo, Vivo, Gionee and Meizu, the sources said.

MediaTek expects fierce price competition in the smartphone-SoC market particularly the mid-range segment in the second half of 2017. This means that it will not see any substantial improvement in gross margin in the rest of 2017.

MediaTek saw its gross margin grow to 35 per cent in the second quarter of 2017 from 33.5 percent in the first quarter. However, the gross margin slid from 35.2 percent during the same period in 2016.

Last modified on 15 August 2017
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