MediaTek Report Year-on-Year Revenue Decline For August

The smartphone and tablet market is changing across the world. In the developed smartphone nations, customers are being fussier over their upgraded devices with some keeping hold of their current devices for longer. This is causing the handset manufacturers grief, especially for the flagship or premium grade smartphones. In the lower and mid-end parts of the market, competition remains tight as manufacturers jostle for market share against very price-aware customers. The smartphone has become something of a ubiquitous commodity item and because of this, so too have the underlying components that go into these devices. This including the System-on-Chips, or the processor, that drives the operating system and software.

Modern system-on-chips typically consist of two or more application cores, a dedicated graphics processor unit (which itself contains multiple cores) and in most cases, the baseband (cellular data modem), WiFi, Bluetooth, location chips (GPS, GLONASS) and often other cores designed with other tasks in mind, such as driving the touchscreen display when the device is in standby. Over the last couple of years we have seen semiconductor designers and manufacturers condense their designs to include all of these components plus manage the migration from the 32-bit ARM7 architecture to the 64-bit ARM8 architecture, which is backwards compatible with 32-bit ARM7 technology. At the same time, we are seeing the process size reduce from a more typical 28nm to today's 20nm and 14nm size: the smaller the chip process size, the lower the power consumption and heat output. To put this into perspective, Qualcomm have been designing integrated system-on-chips for some years now but the rest of the industry has been catching up and, in some cases, overtaking. MediaTek are one example: years ago, MediaTek built what were considered to be relatively crude, inefficient but cheap processors for budget smartphones and tablets. However, in 2015 their designs are comparable and different from Qualcomm's designs. More manufacturers are building smartphones powered by MediaTek, including those companies that had traditionally only used Qualcomm silicon such as Sony.

MediaTek have just announced their August revenue figures, which show a month on improvement of 6.1% but a year on drop of 3.3%. The monthly change has traditionally shown some movement, with July's figures showing a decline from June, but it is the year on figure that is arguably more interesting. MediaTek's 2015 revenue to August are showing a drop of 5.4% compared to the same time period last year, down to NT$131.5 billion. The semiconductor company blamed "unfavorable economic conditions and a more competitive market for handset chips." Just as MediaTek has caught up with Qualcomm by increasing the complexity and sophistication of its system-on-chips, so other chipset manufacturers are snapping at MediaTek's heels with inexpensive (and perhaps less sophisticated) designs. MediaTek are also suffering from the same difficulties as the handset manufacturers: competition for Android devices remains tough and manufacturers are under intense pressure to reduce prices, so are squeezing their suppliers for steeper discounts for components. The table at the bottom of the article is a little confusing, but shows that MediaTek's sales this year have been, overall, poorer than last year. Things may change with the company's new system-on-chips powered by ARM's new Cortex-A72 application core, due out in the next few months.

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About the Author

David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.