Taiwanese chipmaker MediaTek now counts the world’s largest maker of mobile devices, Samsung, as a customer.
While both companies had managed to keep details of the deal under wraps for a while, the cover was blown by MediaTek chairman Tsai Ming-kai when he refused to field questions from reporters on the exploding Galaxy Note 7 as Samsung was the company’s customer.
Samsung is reportedly expected to place orders for up to 10% of the chips that MediaTek makes and plans to use them on its entry-level devices starting next year (2017).
Currently, Samsung has been using older models of its in-house Exynos chips on budget devices with a tiny percentage contracted externally from Chinese chipmaker Spreadtrum Communications. Previously, the company has sourced chips from Broadcom, another chipmaker.
The mobile chip business in the world is dominated by American giant Qualcomm. MediaTek has been the go-to chipmaker of choice for most budget-oriented smartphone brands entering most emerging mobile markets in Asia, Latin America and Africa. It has also not been left behind in the race to produce efficient and super-fast processors as can be seen in the chips it has been marketing under the Helio brand.
Intense competition in the mobile chip business has seen the likes of Texas Instruments exit the market while big names like Intel have struggled to find a footing and NVIDIA’s presence has been somewhat muted. For MediaTek, it is faced with the same market turbulence since big companies like Samsung and Huawei which would make for excellent long term clients already have thriving in-house chip businesses that supply the processors on their high volume high-end devices. LG has already confirmed that it will soon be making its own chips after striking a deal with Intel to use its factories. To boost its fortunes, MediaTek’s chairman was quoted saying that the company has set its eyes on winning Apple as a client which would totally change its fortunes given the iPhone’s high volume sales every year.