Taiwanese fabless semiconductor chipmaker, MediaTek, has apparently won a contract from Samsung Electronics to supply its silicon chips to the South Korean tech company. While this wasn’t announced officially by the Taiwanese chipmaker, the company’s Chairman, Mr. Tsai Ming-kai, apparently gave the game away when he referred to Samsung as a “customer” during a chat with the media on Monday. Answering a question on the Galaxy Note 7 fires and the ensuing recall, Mr. Tsai reportedly said that he was unable to comment on the issue because his company is now one of the suppliers to Samsung Electronics. He also revealed that MediaTek is in negotiations with Apple to supply its chips to the American tech giant.
While it isn’t immediately clear if the Samsung-MediaTek deal relates to MediaTek’s mobile SoCs or its myriad other products, recent reports have indicated that the South Korean company will very likely use MediaTek chips in its entry-level and lower mid-range smartphones going forward. Reports published in the local Taiwanese media earlier this year had also suggested that Samsung is actually in talks with MediaTek to use the Taiwanese company's microchips in some of its Tizen-powered handsets, but neither company has announced anything officially on this subject up until now. The South Korean company generally uses either Qualcomm’s Snapdragon SoCs or its own Exynos chips in its premium and upper mid-range smartphones, while its entry-level handsets often come with Spreadtrum processors.
Even as MediaTek went from a small-time chipmaker for DVD players, televisions and other electronic devices to one of the largest semiconductor companies in the world, its business has largely been restricted to the developing markets for the most part. China, by far, has been the single largest market for the company, with its SoCs believed to be at least partly responsible for the massive success of the indigenous smartphone industry in the country over the past several years. While getting a multinational like Samsung will certainly be a feather in the cap for MediaTek, some analysts have voiced their skepticism about whether the contract will help the company raise its margins, given that most of the chips supplied to the South Korean company are likely to be low-end products.