Chipmakers on both sides of the Pacific are fighting hard for spots inside the millions of smartphones that are being designed, manufactured and sold within China. One of every three smartphones shipped in the third quarter went to China, according to IDC, and of course many of those phones were made there as well. Supplying silicon for those smartphones is a multi-billion dollar business, and U.S. companies like Qualcomm and Broadcom are competing with Asian players including Samsung, Huawei and Taiwan’s MediaTek.
Semiconductor suppliers know that by combining functions and embedding software, they can offer solutions that enable manufacturers to get entry-level phones to market quickly. Now they are stepping it up a notch with faster, smaller chipsets for midrange smartphones. Last week MediaTek launched the first-ever chipset to combine a quad-core processor and a cellular modem on a single chip, the MT6589. “The MT6589 is a big step forward for MediaTek and will position it well in midrange smartphones, particularly in China,” says analyst Linley Gwennap of The Linley Group, adding that “Qualcomm, however, is hot on their heels with the MSM8225Q, which is due to enter production in the first quarter.”
But Qualcomm may have a hard time competing with MediaTek when it comes to price. Taiwan’s largest fabless semiconductor maker is selling its current quad-core solution for much less than Qualcomm’s quad-core chipsets.
Of course U.S. companies have the advantage when it comes to LTE, but LTE is still years away for most of China. HSPA+ is available, and U.S. chipmakers are now building HSPA+ processors for the Chinese market.
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