MediaTek sold almost as many smartphone chips as Qualcomm in Q2

The smartphone application processors (AP) market shrank 26 percent in Q2 2020, claims Counterpoint Research.

As the analyst pointed out, the drop is hardly surprising and coincided with the drop in smartphone sales caused by the pandemic.

Qualcomm remained the dominant player with a market share of 29 percent, but the market share fell by 3 percent compared to the same period last year.

According to Counterpoint Research, the Qualcomm issues have more to do with Huawei than the virus outbreak. In the second quarter of the year , Huawei overtook Samsung to become the number one smartphone maker, and with most of its phones sporting in-house Kirin chips, it’s no wonder Qualcomm’s stake has been falling.

The company’s ability to use Qualcomm-made chips was also impacted by US restrictions, which led to a decrease in the chipmaker’s stake in Huawei and Honor phones.

It is estimated that only 3 percent of Huawei phones sold in Q2 2020 featured a Qualcomm chip. In the second quarter of 2019, the number was 12 percent.

Marktanteil Prozessoren Q2/2020 vs. Q2/2019
Market share of processors in Q2 / 2020 compared to Q2 / 2019 (source: Counterpoint)

Overall, the chip manufacturer subsidiary of Huawei had a market share of 16 percent in the second quarter, which it was behind MediaTek, which had a share of 26 percent.

As smartphone sales rebound, so will the chipset market, and Counterpoint is already seeing signs of it. With the US apparently in no mood to give Huawei some air to breathe, its shipments will inevitably decline and this is expected to benefit Qualcomm, MediaTek and Unisoc.

Huawei’s smartphone sales could drop as much as 75 percent over the next year. Without the company’s own Kirin chips, the company will lose its competitive edge in China, where it is currently focusing most of its efforts on China as the rest of the world has virtually ruled the company out.

As can be seen from today’s report, OPPO, Vivo, Realme and Xiaomi will compete with Huawei for market share in the short term, which will drive demand for Qualcomm’s mid- and high-end offerings in China and Europe, as well as for mid-range and entry-level solutions from MediaTek will boost in Russia, the Middle East and Africa.

Marktanteil Prozessoren Q2/2020 vs. Q2/2019 nach Region
Market share processors in Q2 / 2020 compared to Q2 / 2019 by region (source: Counterpoint)

Looking at the new data, it looks like MediaTek is closing the gap on Qualcomm. The latter has been raising the price of its flagship chips for the past two years, and analysts believe Samsung is looking to capitalize on it by positioning its Exynos SoC as an affordable alternative. The company currently has a market share of 13 percent.

Overall, the AP market is expected to grow over the next three years thanks to the introduction of 5G networks. 5G-enabled smartphones even recorded quarterly growth of 126 percent in the second quarter.

The next generation of cellular connections are also expected to fuel demand for affordable gaming-centric phones, which are expected to grow a whopping 1,011 percent this year.


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