Qualcomm’s smartphone chip share in China plummets while MediaTek rises

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MediaTek catapulted upward from around 17% share of China’s chip shipments to 31.7% in the second half of 2020. (FierceWireless)

Qualcomm saw its of share of smartphone chip shipments in China take a dive in 2020, related to U.S. sanctions and domestic handset makers looking to MediaTek, according to a new report from CINNO Research.

The report released Thursday says Qualcomm’s 2020 share of smartphone System on a Chip (SoC) shipments in China shrank by a whopping 48% year over year. CINNO didn’t include stats for the number of Qualcomm chips shipped.

Overall, the Chinese market saw SoC shipments drop sharply. CINNO estimated 20.8% decline versus 2019 levels, to 307 million units in 2020.

At the end of 2019 Qualcomm led with just under 38% market share by chip shipments. However, that started to fall in the first half of 2020, when Huawei’s HiSilicon took over the number one position at 37% compared to Qualcomm’s then 30.8%.

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Qualcomm’s share dropped further to just over a quarter of Chinese market chip shipments in the second half of last year, while MediaTek rose steeply to capture the top spot for the first time.

Tech analyst Avi Greengart of Techsponential pointed to MediaTek’s action in low- and mid-range 5G smartphones.

“5G has been driving phone upgrades in China this cycle, and MediaTek has been powering the lower and middle range 5G offerings of Chinese brands that make up the bulk of sales,” Greengart told Fierce via email. “Qualcomm is still well positioned in the market overall – especially in the U.S., where Verizon’s mmWave requirements and legacy technical requirements favor Qualcomm’s chips – but MediaTek has certainly made the most of this generational opportunity.”

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As for China, the U.S. continued to put pressure on handset giant Huawei who had been blacklisted and placed on the Commerce Department’s Entity list in 2019, barring U.S. firms like Qualcomm from selling certain tech without government authorization.

In October, Mobile Experts’ Dan McNamara noted that of the approximately 180 million smartphones Huawei would ship in 2020 “the vast majority” would use modems from either its own HiSilicon division using Kirin chips or MediaTek – with parts coming from Taiwan-based TSMC.

MediaTek, meanwhile, catapulted upward from around 17% share of China’s chip shipments to 31.7% in the second half of 2020.  In May the U.S. made moves to further restrict Huawei’s access to technology, including its supply from TSMC. HiSilicon’s share dropped nearly 10% from the first half of 2020 to 27.2% in the second.

“It is undeniable that a series of US sanctions against Huawei and HiSilicon also force major manufacturers to seek more diversified, stable and reliable supply sources,” CINNO stated.

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Along with U.S. sanctions on Huawei, CINNO cited impressive performance by MediaTek’s mid-range Dimensity 800 and 720 platforms adding to its rise.

“The growth of MediaTek's shipments is also inseparable from the support of the four major domestic brands,” CINNO stated.

China’s biggest smartphone makers based on device shipments consist of Huawei, Vivo, Oppo and Xiaomi, according to Counterpoint Research.

But while MediaTek has dominated a lower-end market, CCS Insight’s Wayne Lam wrote in a recent article for Fierce that Qualcomm’s newly announced Snapdragon 480 is a significant move in making 5G smartphones affordable for mass-market adoption.

“With the Snapdragon 480, Qualcomm now has chipsets that serve as bookends to the widest range of smartphones chipsets in the industry,” wrote Lam.

And Qualcomm has wide breadth of ecosystem partners. Chinese handset-makers OnePlus and Xiaomi made appearances during a keynote presentation at Qualcomm’s Tech Summit, which debuted the Snapdragon 888 premium platform.

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MediaTek, for its part, just this week unveiled new Dimensity 1200 and Dimensity 1100 5G smartphone chipsets.

As 5G marches forward, the smartphone processor market is becoming more competitive in China, CINNO said. 

“Looking back at the changes in China's smartphone processor market in the early years of 5G, the market structure has evolved from the dominance of Qualcomm in the 4G era to a three-pronged structure of HiSilicon, Qualcomm, and MediaTek by 2020,” the report stated.