Responding to various rumors about the company's operations, MediaTek CEO Rick Tsai not only mentioned that the annual revenue growth rate of flagship smartphone SoCs will exceed 50% but also set a goal of achieving a 30% market share in the Chinese flagship smartphone market in the short term.
Although the second quarter will see the overall demand for smartphone SoCs returning to the norm as customers have gone through two consecutive quarters of active inventory replenishment, MediaTek's overall development in the smartphone market is still highly anticipated.
High-end products perform strong
Recently, the market has been speculating that the growth momentum of smartphone sales in 2024 will be revised downwards again, with mid-to-low-end models especially lacking sales momentum. This is confirmed by MediaTek's estimates, which have revised the annual growth rate of total shipments to 1-3%.
Despite that, the outstanding growth momentum of high-end models due to the push from AI smartphones is expected to drive the overall value growth of smartphone sales to reach 10-15%, far exceeding the growth rate in unit sales.
The growth momentum of high-end models can still offset the sluggishness of mid-to-low-end models, providing significant support to players in the smartphone industry. Tsai stated that models priced above CNY4,000 (approx. US$550) will be the segment that sees the highest sales growth in 2024.
For MediaTek, the Dimensity 9300, launched at the end of 2023, can be seen as the key product that helped MediaTek make its mark in the flagship smartphone market. The All Big Core architecture design's performance and power efficiency have received praise from the industry and consumers.
Tsai also mentioned that the Dimensity 9300 represents a major operational leap for the company, attracting many new customers and significantly increasing consumer acceptance while increasing the proportion of introductions.
The goal of achieving a 30% market share in the Chinese flagship smartphone market in the short term is also more than just a blanket statement, with Tsai further stating that in the longer term, they hope to continue increasing their market share.
Gaining ground on Qualcomm
It's observed that the key factors that enabled MediaTek to catch up rapidly in the flagship smartphone market are making correct choices in architecture design, continuously improving integration capabilities with flagship smartphone systems, and strengthening brand image.
Qualcomm's upcoming flagship smartphone SoC, set to be launched in the second half of 2024, is reportedly following in MediaTek's footsteps and adopting a full big-core design model to compete with the Dimensity 9400, which will be launched around the same time.
Tsai stated that based on the success of the Dimensity 9300, confidence in the next-generation Dimensity 9400 has significantly increased. With the assistance of the 3nm process, specifications of CPU, GPU, APU, ISP, and other computing cores will all be improved. The performance and power efficiency of the new product are also quite impressive, as the TOPS data will be better than the Dimensity 9300.
Customers are very surprised by the performance specifications of the Dimensity 9400, and it is believed that it will further increase its market share in the flagship smartphone market. Tsai believes that AI smartphones are just like AI PCs in that it's still difficult to precisely define them. Thus, it's hard to judge how high the penetration rate of AI smartphones will be in 2024.
However, one can look at the market conditions for flagship smartphones as a reference. After all, most AI functions, especially generative AI applications, are first introduced in flagship or high-end smartphones. Generative AI is still in its early stages of development; as more people become accustomed to using it, and even become addicted to related features, the popularity will quickly increase.
