Today, Ming-Chi Kuo released a report stating that the iPhone is expected to adopt Apple’s self-developed 5G modem chip as early as 2023. Qualcomm will be forced to compete for more orders in the low-end market to make up for the loss of Apple orders.
Ming-Chi Kuo pointed out that the key to MediaTek’s 5G SoC advantage lies in its close cooperation with TSMC, but Qualcomm will transfer its production orders for low-end (6nm) and high-end (4nm) 5G SoCs to TSMC in 2021 and 2022, respectively. As Qualcomm returns to TSMC, MediaTek’s production advantage will gradually weaken. The report predicts that TSMC will ship Qualcomm’s SM7325 and SM6375 chips in the second and third quarters of 2021, respectively. This will help Qualcomm regain market share from MediaTek.
The report estimates that MediaTek’s 5G SoC market share has surpassed Qualcomm’s, reaching 50%-55% in the first quarter of 2021. It is expected to increase slightly to 55%-60% in the second quarter of 2021, but this also means that future growth potential is limited. The report points out that no brand wants a single SoC supplier to hold a large market share.
In the high-end SoC field, MediaTek still cannot replace Qualcomm. Apple will use its self-developed modem chips, which means MediaTek cannot leverage this to create growth opportunities with new customers.
The report also pointed out that Qualcomm’s challenges include: 5G failing to drive demand for high-end Android 5G phones, losing iPhone modem chip orders as early as 2023, and being forced to compete with MediaTek in the low-end market.
TSMC has greater bargaining power than Qualcomm, so if Qualcomm transfers orders from Samsung to TSMC, it could lead to a decline in profits. Given the weak demand for 5G phones and the expected improvement in supply shortages in the foreseeable future, Qualcomm may need to sacrifice profits to expand its 5G SoC market share.