Unit prices for 5G smartphone chips, which have been pushed down to between US$70 and US$80 from over US$100 previously, will continue dropping but likely at a slow rate in the second half of 2020, according to industry sources.
With China-based handset vendors looking to promote affordable 5G smartphones priced as low as CNY2,000 (US$282.54) later this year, unit prices for 5G mobile chips are highly anticipated to fall, the sources said. The price drops may be slower-than-expected, nevertheless, the sources indicated.
The market for 5G smartphone chips is set to be an oligopoly given only a few suppliers are capable of developing the chip solutions with development costs estimated at as high as nearly US$1 billion, the sources noted. Most chip suppliers adopt 5nm process technology in their 5G chip designs to stay competitive, the sources added.
The latest US trade sanctions against Huawei and its affiliates will likely lead to fewer suppliers engaged in the 5G mobile SoC market, the sources suggested. As a result, unit prices for 5G smartphone chips will be falling more slowly, the sources said.
Competition between Qualcomm and MediaTek, the two major providers of 5G mobile SoCs, is expected to be less intense, given the pair's focus on profitability, the sources continued.
Samsung Electronics and China's Unisoc are other suppliers of 5G smartphone chips.
Article translated by Jessie Shen
