Qualcomm, MediaTek gain big in smartphone application chip market

New Delhi: Qualcomm led the smartphone application processor (AP) market with a 40 per cent revenue share in the first quarter this year, followed by MediaTek with 26 per cent and Apple with 20 per cent, a new report has showed.

The global smartphone applications processor (AP) market posted a double-digit year-on-year shipment and revenue growth in Q1 2021, according to a report by market research firm Strategy Analytics.

The global smartphone AP market grew 21 per cent year-on-year to $6.8 billion in Q1 2021.

5G APs accounted for 41 per cent of total smartphone APs shipped in the first quarter.

“The trade war reshaped the global smartphone AP market in Q1 2021. Both Qualcomm and MediaTek made the most of HiSilicon’s forced exit from the smartphone AP market due to trade restrictions,” said Sravan Kundojjala, Associate Director, Handset Component Technologies service at Strategy Analytics.

“HiSilicon’s smartphone AP shipments declined 88 per cent in Q1 2021, per Strategy Analytics’ estimates. It remains to be seen whether Huawei will spin-off HiSilicon’s smartphone chip business to ensure its future,” he added.

Apple, Samsung LSI and Unisoc also saw shipment and revenue growth in Q1 2021.

“The growth momentum will continue through 2021, driven by an increased mix of 5G-attached APs and post-pandemic demand,” said Kundojjala.

Entry-level 5G APs such as Snapdragon 480 and Dimensity 700 will help smartphone manufacturers bring 5G to lower price tiers in 2021.

The smartphone AP vendors need to maintain healthy average selling prices (ASPs) and optimise their cost structure in light of increasing chip development costs and foundry capacity constraints, the report cautioned.