Qualcomm and MediaTek are expected to each post a double-digit increase in mobile chip sales this year, with gross margin edging up single-digit percentage points thanks to the availability of their high-ASP 5G products, according to industry observers.
Both Qualcomm and MediaTek are expected to see their sales and profits this year driven by robust shipments of their 5G chip solutions, the observers indicated. Particularly in the first half of 2020, a ramp-up in 5G chip shipments will boost their revenues and profitability, the observers said.
However, fierce competitions will start dragging down 5G chip prices in the second half of 2020, the sources noted. Some market watchers have warned of a 20-30% reduction in 5G chip prices this year, which may dent the chip suppliers' profitability.
Nevertheless, 5G chip ASPs will still be relatively high compared to ASPs for 4G chips, the sources continued. ASPs for 5G chips are currently 300-400% higher than those for 4G ones, said the sources, adding that a 20-30% price cut will be insignificant.
Qualcomm has launched its new-generation 5G mobile chips, the Snapdragon 865 and 765 series, with volume production kicking off in the first quarter. MediaTek has also kicked off volume production of its Dimensity 1000 series 5G SoC, and will roll out its Dimensity 800 series chips with shipments set to begin in the second quarter.
Article translated by Jessie Shen
