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mcjw
Yeah, but unlike TSMC, Mediatek employs much more people in the mainland, in ...
mcjw
unfortunately, it's only impressive from a narrow point of view. Slightly ...
Dial 'M' for MediaTek
Junko Yoshida
6/22/2012 7:37 AM EDT
PARIS – MediaTek’s bid to buy Mstar is likely to cement the supremacy of the combined power of the two Taiwan-based companies -- often described as the “M brothers” -- in the digital consumer market, at least for the next several years.
Today, MediaTek alone claims the global number one position in terms of market share in mobile phones, DVD/Blu-Ray players and optical disc drives. MediaTek is the runner-up -- after Mstar -- in digital TV, and holds the number three position in the broadband DSL market.
Move over, Broadcom, STMicroelectronics, ST-Ericsson, and Renesas Mobile.
Although it’s a stretch to compare MediaTek with Qualcomm in the mobile world, MediaTek has steadily risen, to the point where the company is getting the global digital consumer electronics market pretty much wrapped up.
Never underestimate Taiwan-based companies, thinking that they are just low-cost, me-too chip vendors. Those days are long gone.
The strength of MediaTek today lies in its ability to integrate software and hardware as a genuine turnkey solution for system OEMs, to an unprecedented extent. The MediaTek playbook has worked particularly well with a number of emerging handsets and DTV companies in China, allowing MediaTek to extend its reach.
A Renesas Mobile executive, during an interview with EE Times several months ago, marveled at MediaTek’s power to develop complete software to go with its own hardware. “By the time we showed up in China, all the good software engineers were already picked over by MediaTek,” he said.
As for the digital TV market, both MStar and MediaTek have used their proximity to China to build market share and dominate the global digital TV SoC market.
While MStar is said to have exploited its distribution network to gain design wins among a growing number of Chinese ODMs, MediaTek is viewed as being more selective. “They don’t work with everyone. They are much more careful about choosing their customers,” said a TV chip company’s executive who spoke on condition of anonymity.
MediaTek takes pride in its comprehensive customer support. “We give our customers not just reference designs. We offer them ‘total solutions’ from lower-level software, mass production to testing and validation,” crowed MediaTek President C.J. Hsieh during an interview with EE Times at the last Consumer Electronics show.
MediaTek is no stranger to the M&A world, either.
In fact, MediaTek’s aggressiveness in forming partnerships and for its acquisitions is often praised by industry analysts. One significant deal was 2008’s $350 million acquisition of Analog Devices Inc.’s baseband chip product lines, which not only strengthened MediaTek’s product line but also gave the company access to tier 1 handset makers.
Slightly off-topic, but totally relevant, is that MediaTek’s success has everything to do with the downfall of Nokia in recent years. Many industry observers blame Nokia for not catching onto the smartphone trend soon enough, or for not embracing Android. Regardless of these missteps, Nokia had already lost the battle in the feature phone market. It wasn’t the smartphone, but the featurephone that pushed Nokia to the brink.
And who won the battle?
MediaTek.
While Nokia continued to insist on developing hardware/software-integrated solutions on its own, MediaTek, a mere chip vendor from Taiwan, leveraged an army of software developers in China and put together a well-integrated software/hardware turnkey solution for mobile handset vendors who make feature phones in China.
Related links and articles:
www.mediatek.com
www.mstarsemi.com
News articles:
Reports: MediaTek bids to buy rival MStar
MediaTek: You need it, we’ve got it
MediaTek president sees Android as key to China's TVs
SoC providers adjust the picture on DTV strategies
Spreadtrum TD-SCDMA IC goes in Samsung Galaxy S III
Spreadtrum, Dialog shine in fabless rankings
Feeling the heat, MediaTek seeks a comeback
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rick.merritt
6/22/2012 11:23 AM EDT
Taiwan is showing the way for the consolidation China's still relatively small fabless companies so badly need.
The little island may give birth to a Broadcom or Qualcomm before the mainland can make a giant of its own.
Hey, they have already done this in the foundry world. Go Taiwan!
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junko.yoshida
6/22/2012 12:14 PM EDT
In many ways, MediaTek/MStar has already become Broadcom of Asia, in my opinion.
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WW Thinker
6/22/2012 8:58 PM EDT
Please do not stir up any emotion! This only tell us that there are going to be equally competitive solutions from Taiwan, North America, and Europe. May the best solutions win the business in fairly and squarely!
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mcjw
6/26/2012 6:43 AM EDT
Yeah, but unlike TSMC, Mediatek employs much more people in the mainland, in order to satisfy shanzhai's thirst for cheap. And I suspect it's their access to cheap masses of testing engineers to patch up their hack silicon.
Taiwan has a lot to learn from Japan, and we're beginning to, as Foxconn realized it has to rely on Sharp to raise panel quality. I'm not proud that AUO and Chimei makes the worst quality LCDs (AUO CMI are the worst you can get in a panel lottery), and our DRAM give the world more blue screens than any. Even Asus and Acer use Elpida, SEC, or Hynix more than Taiwanese "brands".
TSMC and the ailing UMC are the result of a series of well-coordinated government initiates, as Morris Chang will tell you. But nowadays politics more often than not get in the way.
HTC's VIA is working closely with Beijing to develop ARM processors, because the PRC's policies gives it a lot of support. So it's already happening, Taiwan is showing the way, but not necessarily the best way. It's just a matter of "whatever works".
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dylan.mcgrath
6/22/2012 11:49 AM EDT
Would this deal face scrutiny from regulators? Combined, the two companies would hold a dominant position among non-captive suppliers of DTV chips.
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junko.yoshida
6/22/2012 12:12 PM EDT
Good point. When the two M brothers combined, it will be definitely a formidable market share.
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WW Thinker
6/22/2012 8:03 PM EDT
What regulators? This is not USA. Western version of philosophy and capitalism are not universal!
At the end of the day, the world is round, economy is global. Roman empire collapsed after so many years of properity. Now, we are seeing the Asia-based companies (Samsung, the two Ms) becoming very competitve. This is good because the world is now much more balanced and no single geographies can claim supremacy. Philosphically isn't this what the whole world has been striking for since the existence - equality?
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iniewski
6/22/2012 12:21 PM EDT
Media Tek beating Nokia in hardware/software integration, very impressive...Kris
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junko.yoshida
6/22/2012 12:28 PM EDT
Indeed, Kris. I was actually writing a separate piece focused on just that -- MediaTek beating Nokia -- but this news just broke. So, I couldn't resist adding that to this story.
In fact, I don't think many of us really realize the power of MediaTek's playbook. It is impressive.
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mcjw
6/26/2012 6:23 AM EDT
unfortunately, it's only impressive from a narrow point of view. Slightly off-tangent here, but Mediatek can be compared to Monsanto.
You can say Monsanto is successful in business and technology, but only because it engineers crops that resist its own herbicide, killing all other natural life in the field. Farmers love how it makes their work easier. Consumers love the cheap prices.
Mediatek caters to shanzhai phones, manufacturers love how they can turn a quick buck. Consumers love the "cost performance ratio".
Except it isn't so rosy. Bluetooth can be enabled without paying royalty. Products are toxic to the environment, lacking "design", and carry the risk to explode. Mediatek knows full well this is their clientele, manufacturers and consumers who don't know any better, or just don't/can't care. Mediatek's performance is related to their ability to operate in the grey area.
That is not to say they don't score design wins with Lenovo or the big guys, but that's after they've driven out the traditional players in the mid/low-range like TI.
Mediatek cannot be directly compared to Nokia. At most it can be compared to Qualcomm, whose low end chip is used in the popular ZTE Blade 880, "amazing value" for 99 Euros. And this is a phone that is certified for export in the US, Europe, and Japan. If anyone beat Nokia, it's Huawei and ZTE. Mediatek is nothing without shanzhai.
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elctrnx_lyf
6/23/2012 3:25 AM EDT
Rise of mediated is not surprising to anyone at this moment. They have been pulling things together for a while and coming out strong year after year.
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WW Thinker
6/23/2012 9:30 AM EDT
MediaTek made it big around year 2000 when it became dominant in CD read/write controller. Then it acquired ALi, InProcomm for WiFi, Airoha for RF, then it became #1 in DTV chipset but lost the crown to MStar later, then it last acquired Ralink for WiFi-n/GPON/DSL etc. Like Broadcom, all the acquisition seems to go well. In many ways, MediaTek acts like Broadcom.
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