64bit octa-core SoC poses to lead China's 4G market

A new octa-core processor is set to give its competitions a run for their money. MediaTek, Taiwan's largest chip designer, is now sampling the MT6795, a new 64bit LTE true octa-core SoC and will start selling the chip in the first quarter of 2015, according to Joey Lee, a company spokesperson.

The Hsinchu, Taiwan company, which has a larger share than Qualcomm in China's 3G handset business, should be able to pare Qualcomm's lead in the 4G LTE segment with the introduction of the MT6795, according to Randy Abrams, a Taipei-based analyst with investment bank Credit Suisse.

"The chip will provide Samsung Galaxy Notes-like performance at half the price," Abrams said in a phone interview. "It's for Chinese brands that want performance comparable to Galaxy Notes or the Apple iPhone at the equivalent of $300 to $400 retail for a handset."

MediaTek will launch the product in China's 4G market as competition builds with Qualcomm and Intel. Intel in September announced an agreement to take a 20 per cent stake worth $1.5 billion in China's Tsinghua Unigroup Ltd., the owner of chip designer Spreadtrum Communications and RDA. (Read our report here: China's IC dream gets $1.5 billion backing)

Spreadtrum will develop products with Intel for sale to Chinese customers from the second half of 2015, according to Intel. Taiwan's Commercial Times newspaper recently reported that MediaTek would be able to overtake Qualcomm in China in unit sales by the first quarter of 2015. The Credit Suisse analyst declined to comment on it, but said, "By April of next year, MediaTek should be more competitive."

By the first quarter of next year, MediaTek's MT6795 shipments are expected to reach 30 million units, giving MediaTek a chance to take the lead from Qualcomm, the Commercial Times report said, without citing the source of its information. (In a related story, LTE smartphone SoC offers 2K display support.) Qualcomm has a 68 per cent share of the global base band chip business that was worth $5.2 billion in the second quarter of this year, according to Strategy Analytics.

China's market for mobile phone processors is on track to reach 120 million units by the end of this year. Adams estimates that Qualcomm has about half of that market, followed by MediaTek with about a quarter. Spreadtrum accounts for 5 per cent, trailed by other companies such as Marvell Technology and Intel.

MediaTek will aim the MT6795 at Chinese smartphone brands such as Xiaomi and Huawei, Abrams said. The MT6795 will be on a par with Qualcomm's 600-800 Snapdragon SoCs, which were launched during 2013. The MediaTek chip will support the widescreen WQXGA display standard and run at a clock speed of about 2.2GHz, he added.

MediaTek playbook

MediaTek is repeating a formula that years ago helped the company grab the leading share of the global DVD player business by selling chips to Chinese systems-makers that successfully undercut the prices of competitors such as Sony and Samsung. The strong relationship MediaTek has with Chinese brands continues to give the company a competitive advantage against Qualcomm.

Qualcomm is still playing catch up with companies in China in terms of on-the-ground support, in Abrams' view. "MediaTek does well in providing reference designs to Chinese companies that help ramp up production cheaply and quickly."

Qualcomm in trouble?

Qualcomm faces other hurdles in China. In November 2013, the company said that China's National Development and Reform Commission had begun an investigation related to an anti-monopoly law. That caused some non-licensed device makers to delay negotiations with the company on fees, Qualcomm said in July 2014.

MediaTek has its disadvantages. The MediaTek MT6795 lacks carrier aggregation functions already in Qualcomm chips. 4G LTE Advanced carrier aggregation enables multiple LTE carriers to be used together to provide the high data rates required for 4G LTE Advanced.

Some Chinese smartphone brands may not consider carrier aggregation an important feature because the functionality isn't yet widespread among cellular service providers in China. MediaTek is likely to offer its first products with carrier aggregation by the fourth quarter of 2015, according to the analyst.

China's smartphone business is now in a "second wave" of growth, driven to a large part by replacement demand from domestic consumers. Beyond the domestic market, the Chinese brands will be aiming to expand sales of smartphones in emerging markets.

MediaTek is using TSMC as its foundry for the MT6795, according to Abrams.

- Alan Patterson
??EE Times