We spend an inordinate amount of energy tracking the big chip – the application processor – in a mobile device. As we’ve seen this space is coming down to a handful of players. A more interesting competition is heating up around the APU for the rest of chips needed to make a phone.
Research firm TechInsights, who now owns the Chipworks brand, recently asserted at the Linley Group Mobile Conference that the APU win is key, and offered supporting charts:
Whoever wins the APU will most likely then have 25 to 45% of all chips in a phone.
Their recent teardown of a Samsung Galaxy S7 variant sets the top end of that range. For decades, since poaching the Apple iPod business from PortalPlayer, Samsung’s strategy has been bundling content together using their massive fab capacity for DRAM and flash. In the case of the Galaxy S7, Samsung is fabbing even more parts including a fingerprint sensor, an NFC chip, a touch screen controller, and more including PMICs and an RF front end.
Qualcomm is also applying its RF expertise in a big way, and they have their sights set on millimeter wave front ends for 5G, automotive, and other applications. When Qualcomm wins a APU socket – even in a Samsung device such as the Galaxy S7 Active – supplier diversity increases and other firms fill out the rest of the device.
Then there is MediaTek. While the cost of the APU and the entire phone is lower such as in the Meizu Pro 6, the content around the big chip stays pretty much the same. There are still requirements for DRAM, flash, MEMS sensors, RF amplifiers, microphones, and more.
This small sample size isn’t entirely conclusive, but it does show a fascinating possibility – the mid- to low-end mobile device opportunity is more fragmented, with more competition for an increasing number of sockets. The same high-end functions have now pushed down into the mid- and even low-end devices. Where vendors tripped over themselves to service Apple in recent memory, now they may be fighting for a new crop of mostly Chinese phone vendors in the coming years.
That would indicate there may be more acquisitions in the offing, like the Analog Devices – Linear Technology merger, except with a focus on RF, MEMS, and touch interface technology. What do you glean from the TechInsights data?Share this post via: