MediaTek is on the Move with TSMC!

MediaTek (MTK) recently made the news for announcing their first leading edge SoC (Helio X30), a 32% increase in quarter over quarter sales, and an expected 30% increase for the year. Both of which deserve a closer look as we move into the second half of 2016 which should be very strong for MTK TSMC, and the fabless semiconductor ecosystem.

First a little bit of history: MTK was originally part of pure-play foundry UMC making chips for the consumer electronics market but was spun out in 1997 and taken public on the Taiwan Stock Exchange in 2001. MKT started out making chips for DVD players, TV, and early mobile phones. They expanded into smartphones and tablets and today are the number two SoC company, QCOM being number one. QCOM dominates the high end SoCs/smartphones while MKT is known for mid to low end products.

Up to 2009, MTK’s success was in 2G until they launched a wide range of chips for 3G moving up to 40nm chips in 2012 (QCOM was already at 28nm). Today MTK has the MT6572 SoC using different flavors of TSMC 28nm powering their revenue jump with more than one hundred and fifty design wins in production. Mediatek is covered in our book “Mobile Unleashed” in chapter 10 “An Industry in Transition”. We could have done a complete chapter on them like we did with Apple, Samsung, and Qualcomm and we probably should have because it is an interesting story.

The big change I have seen is MTK pivoting from a low cost trailing edge technology company to a leading edge SoC provider. In my opinion TSMC is behind that change since QCOM (TSMC’s largest customer) moved to Samsung at 14nm and 10nm. MTK will now be the first to showcase a leading edge TSMC based 10nm SoC in the first half of 2017 competing directly with QCOM and Samsung.

It really is a big jump since MTK has yet to release a 16nm SoC, but with TSMC’s help it will not be as big of a challenge. Remember, TSMC and MKT are both in Hsinchu just a mile or two away. In fact, quite a few former TSMC employees now work at MTK Coincidently, or not, MTK CEO Ming-Kai (MK) Tsai was recently awarded the Dr. Morris Chang Exemplary Leadership Award for pioneering the Taiwan semiconductor design industry. I was at the award presentation and found MK’s humble acceptance speech to be incredibly inspiring making him one of my favorite semiconductor CEO’s, absolutely.

Unfortunately, MTK has not made the jump to an ARM architectural license yet, like Apple and QCOM, so their Helio X30 chip will be more “show than go” so don’t expect a huge pile of high end smartphone design wins. The Helio X30 uses four Cortex A73 cores clocked at 2.8GHz, four Cortex A53 cores clocked at 2.2GHz, and another two A53 cores at 2.0GHz, PowerVR 7XT quad-core graphics, and a Cat 12 LTE modem. The point, however, is that TSMC is fully backing MediaTek’s thrust into the leading edge (16nm, 10nm, and 7nm) which is a serious “shot over the bow” of QCOM and Samsung.