TAIPEI — MediaTek, the second-largest designer of mobile phone chips after Qualcomm, says it has chosen Taiwan Semiconductor Manufacturing Co. (TSMC) to make 7nm products.
While it did not disclose a timeframe for the products, MediaTek said it is cooperating closely with its long-term fab partner at the new node.
"Low-power computing is the focus of TSMC and MediaTek," said Rick Tsai, the new co-CEO of MediaTek, during an investor event at the company headquarters in the Hsinchu Science Park. "We hope TSMC's leading-edge technology will help us create new business."
Tsai, who was president and CEO at TSMC from 2005 to 2009, is switching roles from boss at the world's biggest foundry to a key customer.
"TSMC has a very competitive node at 7nm," Tsai said. "TSMC's extreme ultraviolet (EUV) approach is good."
Rick Tsai (left), the new co-CEO of MediaTek, besides Chairman M. K. Tsai at the company headquarters in the Hsinchu Science Park. (Photo: EE Times)
MediaTek's choice may be another sign that TSMC has gained an advantage over rival Samsung in the race to deliver 7nm silicon. MediaTek competitor Qualcomm appears to have also chosen TSMC for the 7nm version of its Snapdragon line of smartphone chips, according to media reports. Qualcomm was the first company to make 10nm chips, using Samsung as its foundry this year.
Despite speculation that Tsai might use his background with TSMC to squeeze the company for better pricing or even shift more of MediaTek's business to smaller foundries, the ties between TSMC and MediaTek appear solid.
"We haven't talked too much about a fab strategy yet," Tsai said while sitting together with MediaTek Chairman M. K. Tsai at the Hsinchu event. "TSMC is our strategic partner. There's no question about that."
Even so, MediaTek will continue to work with other fab partners, Rick Tsai said.
Rick Tsai and M. K. Tsai, who are unrelated, will share the co-CEO role at MediaTek while M. K. Tsai concurrently serves as chairman.
Recovery in Sight
MediaTek aims to recover in the mobile business after losing market share to Qualcomm early this year. After years of gains against Qualcomm with handset customers in China, the Taiwanese company has slowed the pace in product upgrades this year, offering nothing better than a Cat 6 modem, while Qualcomm raised the bar with the 10nm 835 Snapdragon, including a Cat 16 modem.
MediaTek will bring Cat 7 to the product mix later this year, followed by Cat 12 next year.
The recovery of the mobile business is MediaTek's top priority, Chairman Tsai said.
In the second half of this year the company's modem cost for the entry-level Helio P will improve significantly, the chairman said, expressing his hope that gross margin and market share will start to recover at that time.
Still, a full recovery for MediaTek could take as many as two years, he said.
Chairman Tsai dismissed rumors that he hired Rick Tsai to put out fires at MediaTek. The former CEO of TSMC is an asset who MediaTek would gladly bring on board under any circumstances, according to the chairman.
Rick Tsai, for his part, demurred initially on the strengths he'll bring to the world's third-largest chip designer.
"I don't really understand products," he said. "I am good at execution and also customer relations."
Tsai also praised the work MediaTek has done with artificial intelligence (AI) and deep learning.
"We are working with key companies in Japan and America," he said. "The mobile phone business is slowing down. There still will be growth in the future but we need to expand. We need to find new growth opportunities and businesses."
—Alan Patterson covers the semiconductor industry for EE Times. He is based in Taiwan.