MediaTek, Qualcomm Push into AI Markets Beyond Mobile
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MediaTek, one of the world’s largest mobile chip developers, announced its plan recently to adopt TSMC’s cutting-edge 2-nanometer chipmaking technology as early as September, signaling its intent to stay competitive in the AI era by accessing the most advanced manufacturing available. This move, along with its stated ambitions in laptop and data center AI chips, highlights a significant trend: traditional mobile chip designers are expanding aggressively into new markets driven by the artificial intelligence boom, pushing beyond their core smartphone business.
Why are mobile chip companies looking beyond smartphones?
For years, the mobile market, particularly smartphones, was a primary growth engine and innovation driver for chip companies like MediaTek and Qualcomm. However, while still significant, the smartphone market has matured and experienced cyclical downturns, leading to slower or more volatile growth compared to the explosive demand seen in areas fueled by AI.
To sustain growth and capitalize on new opportunities, MediaTek and Qualcomm are leveraging their extensive expertise in designing complex, power-efficient processors to target emerging markets where AI is driving significant compute needs. This includes high-performance computing for laptops, personal AI computers, and even specialized AI accelerators for large data centers.
What markets are MediaTek and Qualcomm targeting?
MediaTek and Qualcomm are increasingly battling in the PC market, particularly for laptops. MediaTek is using TSMC’s 3nm technology for chips powering Google’s high-end Chromebooks and partnering with Nvidia on a personal desktop AI computer called “Spark.” Qualcomm has also expressed strong commitment to the PC market, leveraging its long history of designing processors based on Arm architecture. The shift towards Arm-based laptops, spurred partly by the success of Apple Silicon, is creating a significant opportunity, with estimates suggesting Arm-based laptops could account for 46.5% of the global market by 2027, up from 26.9% in 2022.
Beyond PCs, MediaTek also reiterated its ambition to build customized AI accelerators for data centers. While this puts them in direct competition with established players like NVIDIA and AMD, and the growing wave of custom silicon from hyperscalers (Google, Amazon, Microsoft, Meta), it reflects the scale of opportunity AI is creating across different computing environments.
How does advanced manufacturing fit into this expansion?
Expanding into markets like high-end laptops and data center AI requires significantly more processing power and efficiency than traditional mobile chips. This is where access to the most advanced semiconductor manufacturing technology becomes crucial. MediaTek’s commitment to using TSMC’s 2nm, 1.4nm (A14), and 1.6nm (A16) nodes — technologies that are not yet in commercial mass production but represent the cutting edge — is a direct response to this need.
These advanced nodes enable chip designers to pack more transistors onto a chip, improving performance and power efficiency, which is essential for competitive chips in these new markets.
Being an early adopter of TSMC’s latest nodes, as MediaTek plans to be alongside companies like Apple, provides a potential performance advantage over competitors relying on older processes, highlighting how access to foundry leadership (like TSMC’s) is key to staying competitive in the AI hardware race across various segments.
What advantages do these mobile chip companies bring to new markets?
Companies like MediaTek and Qualcomm have decades of experience optimizing chip performance for mobile devices where power efficiency is paramount. This expertise in getting maximum performance out of limited power budgets translates well to the demands of laptops and other portable devices, and even to energy-conscious data centers. Their deep knowledge of designing complex systems-on-a-chip (SoCs) integrating various components like CPUs, GPUs, and specialized AI processing units, often based on flexible architectures like Arm, provides a strong foundation for creating competitive products for new computing platforms driving the AI revolution. Their ability to consistently deliver high volumes of chips, as demonstrated by MediaTek topping mobile chip shipments for 18 straight quarters, also positions them well for scaling in these expanding markets.
What are the challenges they face?
Moving into established markets dominated by different architectures (like x86 in PCs, dominated by Intel and AMD) and different software ecosystems presents significant challenges. While Arm-based designs are gaining traction, building market share requires convincing PC manufacturers and enterprise customers to adopt their platforms.
The competitive landscape in data center AI accelerators is also fiercely contested, requiring not just powerful hardware but also robust software stacks and ecosystems, an area where NVIDIA currently holds a significant lead (the “CUDA moat”). The expansion into these new arenas requires strategic partnerships (like MediaTek’s with Nvidia and Google) and sustained investment in R&D to keep pace with the rapid advancements in AI hardware and software.
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Anusuya Lahiri
ARPU
Staff Writer