Welcome to the WeChat subscription number of “Sina Technology”: techsina
Text / Liu Rui
Source / Yuanchuan Research Institute (ID: caijingyanjiu)
To engage in semiconductors in Taiwan, it is necessary to understand both technology and management, as well as a sense of overall situation and alignment. MediaTek is T0 in this regard.
In the 2018 Sino-US trade friction, MediaTek’s second-in-command Cai Lixing showed his superb political emotional intelligence: “There is friction between the two largest economies, and the industry has no room to talk [4].”
It’s a pity that the long-sleeved dance can’t stop the fate of the left and right pincers:
In the gap between China and the United States, looking downstream, almost all of MediaTek’s customers are in mainland China; looking upstream, MediaTek’s major shareholder is an American institution, and the EDA software and chip IP used are also inseparable from the United States.
In the industry chain game, MediaTek is the seventh largest chip design company in the world and the mobile phone chip company with the largest shipment; but for customers, from mobile phones to the Internet of Things, a default rule is that there is no cost to backstab MediaTek.
This special feature makes MediaTek have several very distinctive features compared to Qualcomm and Samsung:
1. The technology shift period is like a rainbow, such as the function phone to the smart phone; the technology shift is completed and the decline is revealed, such as the later stage of 3G and 4G.
2. Victorious generals in the blue ocean market, such as the Internet of Things; bereaved dogs in the red ocean market, such as mobile phone chips.
3. The product is often better than the scale, but the scale does not bring matching revenue.
But is this commercial dilemma really just a problem caused by household registration?
political cracks
An obvious fact is that the growth of MediaTek and the development of China’s mobile phone market are in step with each other, even intertwined.
In the financial report, MediaTek divides customers into three categories: Taiwan, Asia and others. In 2021, Asia’s revenue will account for 91.38%, basically from mainland China. Of course, Samsung is an exception – after giving up self-developed chips, Samsung’s mid-to-low-end models also began to cover MediaTek’s chips in batches.
This kind of interdependence has a history: since the turnkey program was born in 2005, every leap of MediaTek is the most direct interpretation of Taiwanese chips and mainland mobile phones.
Here is a background science. The so-called turnkey means that hardware such as chips and software such as Android system optimization are delivered together, and the production of mobile phones is simplified into two steps of chip motherboard procurement and assembly. The threshold for producing mobile phones has been greatly reduced, which has also contributed to the prosperity of cottage phones.
In 2009, MediaTek surpassed Qualcomm by relying on Shenzhen Huaqiangbei three-card three-standby copycats, and became the world’s largest mobile phone chip manufacturer for a time. A year later, MediaTek, together with OV, Gionee, Coolpad and other brands, mainly promoted cheap 3G smartphone chips, and relied on the 799 yuan Redmi to stabilize the low-end market.
Later, although it was Qualcomm who often appeared at the press conference, 70% of the domestic mobile phone brands that shipped mainly mid-to-low-end thousand-yuan phones were equipped with MediaTek chips.
Relying on the huge shipments of low-end and mid-range models in the Chinese market, MediaTek has also become the world’s largest mobile phone chip factory. In terms of revenue, it has even surpassed Nvidia and AMD, and is the world’s seventh largest chip design company.
Almost all domestic mobile phone brand customers have brought MediaTek’s invisible champion status, and also made MediaTek a “pro-China” company that needs special treatment in the context of the United States.
A typical example is that Qualcomm is allowed to supply 4G chips to Huawei, but MediaTek still cannot.
Local media in Taiwan also reported that an American official beat MediaTek executives in person, implying that it was too close to mainland China [2].
Translate, even if the world’s first, MediaTek’s neck, is still in the hands of Americans. For example, the ARM architecture, EDA software, and chip IP necessary for chip design; the etching machine, ion implanter, and other equipment necessary for chip manufacturing are all the nirvanas that the United States has stuck around the world.
Of course, this kind of peace has both sides, and when there is change, both sides are beaten. MediaTek is not the only one, but the common destiny of the Baodao electronics industry.
However, the particularity of MediaTek is that its business is concentrated in the blue ocean market and the mid-to-low-end market. When the industry is booming, it can rely on low prices to compete continuously; but now that anti-globalization is prevalent, supply chain security is greater than efficiency. The weakness of MediaTek’s lack of irreplaceability will be magnified.
For example, Qualcomm, although everyone is familiar with the mobile phone SoC, but Qualcomm’s baseband chip is also a bottleneck in mobile phone manufacturing, and even Apple can’t find a substitute.
Another example is TSMC. Due to irreplaceable technical barriers in chip manufacturing, it has more room to maneuver when faced with changes in the macro environment. But MediaTek obviously does not have such irreplaceability.
To put it bluntly, it lacks bucket dip value.
The fate and struggle of the spare tire
As a spare tire, MediaTek has never given up its efforts to become a regular.
In 2015, MediaTek launched the Helio X series of SoCs with a clear goal, pointing directly at the home of Qualcomm’s 800 series.
At the time, Qualcomm 810 took the lead in adopting TSMC’s 20nm process, which generated huge heat. The major mobile phone manufacturers with no core available have also given MediaTek enough face at this time, and they have installed the Helio X10 into the flagship machine, and the HTC One M9 has directly reached the 4,000 yuan gear.
The right time and place seem to be all on the side of MediaTek.
Seeing that the entry into the high-end is only a step away, Xiaomi has launched the Redmi Note 3 equipped with Helio X10, the ancestral price is 799, and the market is calling its conscience. For a while, major manufacturers followed suit and directly turned the high-end Helio X10 into a standard SoC for a thousand yuan machine.
This is the first problem that MediaTek encounters when it hits the high-end market: it’s not that Fager’s chips are not high-end, but that you all put Fager’s high-end chips into low-end machines.
Later, MediaTek launched the iterative X20/X25 chip to make a comeback. Only Meizu was willing to take out the flagship Pro6 priced at 2699 yuan to try it first, which moved MediaTek’s comrades to tears. It’s a pity that the market will not buy again this time.
For the follow-up X30 chip, MediaTek skipped the 16nm process and directly adopted the TSMC 10nm process. However, the Meizu PRO7 equipped with the X30 was priced as high as 3380 yuan, and the response was mediocre again.
After two consecutive generations of products failed, Meizu, a close comrade-in-arms, resolutely rebelled against the revolution and signed a settlement agreement with Qualcomm. Qualcomm has successively launched mid-to-low-end 600/400 series chips, which hit the doorstep of MediaTek.
Does the story look familiar? That’s right, before and after the popularization of 5G, the familiar routine was staged again.
In 2020, the wave of 5G replacement is coming, when Huawei is being suppressed, Chinese brands are collectively rushing to the high-end, and MediaTek took out the Dimensity series chips. Subsequently, Qualcomm’s power consumption of the Snapdragon 888 overturned due to the manufacturing process and other reasons, giving Fage’s Dimensity 9000 a good opportunity to stand up.
Various manufacturers have also given enough face to Fage. Vivo’s X80, oppo’s Find X5Pro, and Honor’s 70 series all use Dimensity 9000. Even Qualcomm’s close comrade-in-arms Xiaomi also purchased Dimensity 9000+, and a Xiaomi came out. 12 Pro Dimensity Edition.
This time, Fage seems to be just a step away from the high-end market.
But then, Qualcomm, who was crying by Samsung, switched to TSMC and launched 8+gen1, which also uses TSMC’s 4nm. During the same period, the mainland mobile phone chip factory Unisplendour Zhanrui grew rapidly last year and began to start in the low-end market, eroding MediaTek’s share.
In the financial report, MediaTek’s monthly performance has declined for four consecutive months, and its performance outlook has been repeatedly lowered.
Every time, MediaTek is a fire-fighting pioneer, but again, every time, MediaTek’s counterattack story is short-lived.
Behind this, in terms of technology and route selection, MediaTek does have some problems, such as forcing ten cores on the X20, but the 20nm process cannot handle such a high power consumption, so it locks the core and reduces the frequency at any time. In addition, MediaTek did not foresee the explosion of the mobile game market after 2016, and the follow-up in GPU performance was slow.
But on the other hand, it is not difficult to find that, compared with MediaTek’s short-term occupation of the high-end market, it needs to meet the three conditions of the industry being in a technology switching period, the cooperation of downstream brands, and the loss of Qualcomm’s chain; Qualcomm’s fall and recovery are always divided. Outside easy. Why?
A big failure of Apple’s chip self-research has revealed the mystery: In 2018, due to meeting with Qualcomm in many courts, Apple, in a fit of anger, abandoned the use of Qualcomm baseband chips for the iPhone XR/XS/XS Max mobile phones released that year. Turn to the arms of Intel.
As a result, the price of changing the baseband chip supplier was that the “signal gate” incident broke out again, and Apple was once again sprayed into a sieve by users. Since then, Apple has tried to develop its own baseband chip many times, but it has repeatedly ended in failure.
Yes, the baseband chip, a component in a mobile phone SoC responsible for encoding and decoding the signals sent and received, is also the most complex part of the entire chip SoC, and it is the only secret that Qualcomm is unique in the world.
The spare tire seems to have become the fate of MediaTek.
Since the mobile phone market is destined to be a spare tire, what about changing the track?
The dilemma of the giant game
MediaTek has never given up on finding new blue ocean markets, but the road is not always smooth.
In the past few years, MediaTek has experimented with many ARM-based edge products, such as Chromebook chips, voice assistant products such as Amazon Alexa, HomePod or Google Home, as well as Wi-Fi chips, TV chips and other products. A few years ago, in the face of Qualcomm’s pursuit, MediaTek once followed Xiaomi and Transsion to kill the Quartet in the Indian and African markets.
This type of market is characterized by a small scale and no very high technical barriers, and its competitiveness is mainly based on price. Therefore, MediaTek, which has always been good at shipping mid-to-low-end products, quickly became the overlord of the Internet of Things, but the other side of the story is that after reaching the top, the profit contribution from the Internet of Things business is not much.
What about playing a big game and doing some highly technically difficult things?
The recent cooperation between MediaTek and Intel is likely to be a breakthrough: Intel founds some mature process chips of MediaTek. In exchange, Intel opened up the x86 architecture to MediaTek.
It looks like a win-win idea. But for MediaTek, there are a lot of hidden costs to replace the foundry. For example, although it is the same process, the production line specifications of different factories are actually different, and it needs to be completely redone from manufacturing to packaging. Therefore, the industry estimates that Intel’s foundry MediaTek chips will take at least a year and a half to go offline.
What’s more, Taiwan already has a large number of fabs such as TSMC, UMC, NSMC, etc. Why should production and manufacturing be far away?
The allure of the x86 architecture is simply too great.
On the one hand, most PCs around the world use the x86 architecture, so much so that it’s almost an industry standard. On the other hand, the assembly plants represented by Foxconn and Wistron in Taiwan have been actively entering the data center server business over the years, and X86 is also the core technology architecture in the server field.
But unlike ARM’s openness, x86 has been an extremely closed system dominated by Intel and AMD over the years. In 2009, the European Union sued Intel, accusing Intel of abusing the market dominance of the x86 architecture.
With the new CEO Kissinger taking office, Intel changed its strategy in the past, not only opened up its own chip foundry business, but also attracted customers through the authorization of the x86 architecture, enriching the scale of the x86 camp. MediaTek is expected to use Intel to enter the low-end x86 chip market.
All the ideas are beautiful. But the problem is that after entering the chip foundry business, Intel has become a head-to-head competitor with MediaTek’s largest chip foundry, TSMC.
However, TSMC, Intel, and MediaTek can’t afford to offend.
This led to a very interesting scene. When the US Chip Act announced that the tens of billions of dollars in subsidies were on the line, Intel, which was “deceiving and eager to make up for it,” said in a press release published in cooperation that MediaTek would use its own “advanced manufacturing process.” However, MediaTek’s press release said that its cooperation with Intel is a “mature process.”
It is somewhat unkind to call the process 11 years ago an “advanced process”. And MediaTek’s acquiescence to “respective representation of a process” obviously does not want to offend TSMC. They also specifically emphasized in the press release: We still work closely with TSMC on advanced processes.
After all, in December last year, MediaTek released the Dimensity 9000 processor with great success, and TSMC’s 4nm process is the hero behind the scenes. With the growing gap between Samsung and TSMC, TSMC has almost become the only choice for mainstream mobile phone SoC foundry.
Caught in the game between different giants, MediaTek is always cautious.
end
Going back to the question at the beginning, did the hukou push MediaTek into the cracks? It can only be said that it is related, but not absolutely.
MediaTek is a company with very distinctive business characteristics, and it can be the first to enjoy the dividends of transformation in every emerging market. For example, in the smart TV market, MediaTek started its layout in 2012 and won nearly 70% of the market.
On the Internet of Things chips, it is not known that almost all shared bicycles use MediaTek chips.
But on the other hand, when the market enters the stage of increasing the premium and competing for added value, MediaTek’s technical shortcomings will be exposed.
MediaTek is one of the top ten chip design companies in the world, but it has never had its own “base”. It can only enrich its large rear through blue ocean markets and contribute food and grass to mobile phone chips. Moreover, MediaTek is a listed company. Under the pressure of performance, it often wants to break through, but it is reluctant to take a share in the low-end market, and it is difficult to concentrate its efforts in hesitation.
Once the semiconductor industry superimposes the influence of geopolitics, companies with the right to speak can have both sides, but Fage can only suffer from both sides.
So, don’t say that Fa Ge didn’t work hard, Fa Ge never had to choose.
This article is reproduced from: https://finance.sina.com.cn/tech/csj/2022-11-07/doc-imqmmthc3665361.shtml
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