Top

Foundry Node Migration to Shape Smartphone SoC Zero-sum Game

  • MediaTek’s sufficient capacity support from TSMC’s 6/7nm is attributed to its market share gains in 2021. Its next flagship 5G SoCs, under TSMC’s 4/5nm during H1 2022, will enter the top-end merchant market.
  • We do not expect foundry supply for AP/SoC in 2022 to be a major concern after capacity expansion and yield improvement. The competition in 5G AP/SoCs will further intensify, as Qualcomm seems more aggressive on wafer orders to maintain its leading position.
  • By 2025, 60% of global smartphone AP/SoCs will adopt foundry nodes at 5nm and below, one of the major driving forces of capacity expansion in TSMC and Samsung Foundry.

 New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires – May 12, 2021

The global foundry strategy and chipset demand-supply dynamics are shaping the smartphone SoC competition. According to our latest research, due to the changing market dynamics, MediaTek is poised to dominate the overall smartphone chipset market in 2021 while Qualcomm is expected to do the same in fast-growing 5G smartphone chipset market. The competition has never been so fierce, as MediaTek has narrowed the gap with Qualcomm.

MediaTek and Qualcomm a Zero-sum Game

Talking about the importance of advanced process nodes for future 5G smartphone growth, Research Analyst Parv Sharma said, “For mainstream 5G smartphones, 6nm and 7nm are the major foundry nodes offering the best performance and price to AP/SoC vendors looking to more than double their shipment growth in 2021. MediaTek has successfully secured TSMC’s capacity since last year for its Dimensity 5G chipsets, a turnaround from 2019. This has helped MediaTek to go aggressive in targeting the high-volume sub-$250 (mid-tier) 5G smartphone segment. For example, we believe MediaTek’s allocations for OVX (OPPO, vivo and Xiaomi) are on the rise, from the 20-30% levels of 2020 to over 40% in 2021, coupled with a better supply outlook for these high-growth OEMs and their 5G portfolio ambitions. On the other hand, Qualcomm chipsets have been constrained for the first half of 2021, directly benefitting MediaTek as this has become a zero-sum game.”

Sharma added, “Qualcomm suffered from production constraints at 5nm in Samsung, and for other supporting peripheral ICs, in the first half of 2021. However, our supply chain checks indicate Qualcomm will catch up in the second half of 2021, securing more capacities from TSMC and other foundries to improve the supply and yield at Samsung in the coming months. This should allow the San Diego-based vendor to target the mainstream 5G market, mainly in China and elsewhere, with its Snapdragon 4, 6 and 7 series chipsets. 5nm is the most advanced node, which will be mainly used for 5G premium/flagship models during 2021. All eyes will be on Qualcomm to see whether it diversifies its foundry strategy in 2022 and takes some capacity share away from Apple, which leads in the advanced node capacity shares for its high-demand A and M series chips”.

This should help widen the lead in terms of value/revenue where Qualcomm benefits from a better product mix, with greater demand for its higher-ASP Snapdragon 7 and 8 series chipsets. Qualcomm’s system-level integrated offering expands the overall semiconductor opportunity from SoC to RFFE. Qualcomm is generations ahead when it comes to premium offerings, from SoC to connectivity (like mmWave).

Counterpoint Research Smartphone SoC Shipments Outlook for Top Four Vendors by Foundry Nodes - 2021
Source: Counterpoint Research, Foundry-SoC Tracker, May 2021

Looking into 2022, our initial thoughts on technology trends point to the migrations of more 4nm/5nm designs by Qualcomm and MediaTek. Commenting on the research, Research Director Dale Gai said, “MediaTek’s next-generation flagship 5G SoC models (still under the Dimensity series) will become the company’s milestone in smartphone chipsets by entering the SAM (Service Available Market) with the end-device price tag of over $500. This merchant market has been dominated by Qualcomm’s flagship models based on leading-edge foundry technologies”.

Gai noted, “MediaTek will likely debut the new Dimensity series, including 5nm/6nm chipsets, in H2 2021, followed by new 4nm/5nm chipsets during H1 2022, and even 3nm tape-out in H2 2022. These new products will have some meaningful technological breakthroughs for MediaTek, targeting China’s premium market with the majority of wholesale prices in the $400-$700 band. Qualcomm is expected to stay at Samsung for 4nm on its new flagship models in 2022, though diversification would be the key moving forward. Apple appears to be the leader again, migrating to 3nm at TSMC in H2 2022. Compared to 2021, capacity constraints for AP/SoC in 2022 may not be the major concern since the effective capacities of 5nm from both TSMC and Samsung Foundry are expected to increase during this year.”

Smartphone SoC Migration Roadmap

Our foundry-to-smartphone AP/SoC research not only takes the bottom-up approach to analyze the near-term demand but also forecasts the long-term trend to see if a foundry could offer enough capacity in the leading nodes.

Counterpoint Research Smartphone SoC-AP Wafer Demand by Foundry Nodes, 2020-2025
Source: Counterpoint Research, Foundry-SoC Outlook, May 2021

Commenting on the outlook for foundry nodes migration, Gai said, “We estimate that by 2025, 60% of total smartphone AP/SoCs will be fabricated in most advanced foundry nodes, including N5, N3 and even N2. Larger average die size, lower throughputs from increasing EUV layers, and higher yield rate uncertainties beyond 3nm are the likely drivers for more wafers in foundries processing the cutting-edge technology nodes for smartphone SoCs. The N5 node, which brings significant PPA (power, performance and area) enhancement from N7 and N10/12, will be a long node under the foundry roadmap for most Android-based 5G SoC migrations in the next two years. The total wafer consumption of N5 (including 4nm and 5nm) will account for roughly 25-30% of total built-in N5 capacity in the foundry industry during 2023-2024 (excluding Intel Foundry Services).”

Gai added, “Monitoring this outlook is crucial for the SoC vendors, smartphone OEMs and other upstream/downstream players to plan and align their mid- to long-term roadmaps with the forecasted available foundry capacity.”

For our comprehensive research on foundry to chipsets to devices, feel free to contact us at the contacts below.

Background:

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Dale Gai

 

Neil Shah

Parv Sharma

Follow Counterpoint Research
press(at)counterpointresearch.com

Related Posts

Counterpoint research is a young and fast growing research firm covering analysis of the tech industry. Coverage areas are connected devices, digital consumer goods, software & applications and other adjacent topics. We provide syndicated research reports as well as tailored. Our seminars and workshops for companies and institutions are popular and available on demand. Consulting and customized work on the above topics is provided for high precision projects.

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited

Registration

In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.