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MediaTek Benefits From China's Anti-Monopoly Probe

Published: Dec 12,2013

MediaTek Inc., one of Taiwan's leading integrated circuit designers, which supplies chips mostly to Chinese phone makers, may enjoy from China's anti-monopoly probe lately. According to a research report that its revenues also show a bullish trend.

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Qualcomm Inc., has always been a huge rival over MediaTek Inc. in smarphone chips' market, especially in China. However, the situation has changed due to Chinese regulators have launched an investigation into the mobile chip maker tied to the country's anti-monopoly law.

The analyst estimated that smartphone vendors in China need to pay nearly US$2.4 billion in combined licensing fees this year and roughly US$3 billion in 2014. Showing that this might be a cause that those smartphones' vendor aim at Qualcomm Inc., in an effort to garner more bargaining power in negotiations over 4G licensing fees.

China has just awarded 4G licences early this month to China Mobile Ltd, China Unicom Hong Kong Ltd and China Telecom Corp Ltd. At this very moment, only for China Mobile Ltd, needs to order more than 4 billion smartphones which is 4G embedded.

With the reason that Qualcomm Inc. is now facing the charges against anti-monopoly law, it's probably doomed to lose the 4 billion orders from China Mobile or from others. Anaylst said that all these orders may likely go to MediaTek Inc.

MediaTek, which already controls the major market of China's low-cost and mid-range smartphone, unveiled the world's first “true octa-core” mobile processor in China last month to woo the high-end smartphone and tablet markets.

Market information advisory firm iSuppli said in the report that MediaTek could post US$4.43 billion in sales for 2013, a 32.1 percent annual increase, advancing its ranking in the global IC market. Also, the recent blow at Qualcomm Inc. results in local handset brands may be looking to use 4G solutions from MediaTek.

Market analysts also said the fourth-quarter guidance was beyond expectations, as MediaTek has gained the upper hand in competition in the huge China smartphone chips' market.

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