Recently, MediaTek announced a partnership with Nvidia targeted at the potentially huge and rapidly growing autonomous and software-defined vehicle market. This includes capabilities for in-cabin “infotainment” as well as operational components for the power train and ADAS.
The partnership will bring MediaTek’s Dimensity Auto ARM-based processors together with GPU and AI chiplets from Nvidia and combine the strength of each company’s auto portfolio. This collaboration will also enable leverage of the increasing platform capabilities that Nvidia is putting in place with its automotive-focused assets (Nvidia DRIVE). By deploying Nvidia AI capability in a new SoC, together with Nvidia’s automotive platform software, MediaTek aims to enter a market that to date has been primarily dominated by others.
Originally seen as a commodity supplier of low to mid tier products, MediaTek now has ambitions of becoming a high end producer of leading edge processors and platforms. Its Dimensity product line offers significant competition to Qualcomm and Samsung when it comes to premium mobile devices. And its partnership with Nvidia is now pushing directly at the supposed advantage that Qualcomm brings to the autonomous and digitally enhanced vehicle market with its processors and platform capabilities.
We see this announcement as a “shot across the bow” signaling that MediaTek intends to fiercely compete for this emerging and potentially huge market. Its partnership with Intel on providing 5G modems for mobile computers, while not yet a major marketplace success, shows that it can and intends to compete at the higher end of the market, and not just the commoditized lower end.
MediaTek has been putting the required resources in place for some time, and we expect to see other market-expansion announcements coming for MediaTek in the future as it aggressively pursues advanced opportunities that can create new and peripheral markets for their technology and expertise.
What does this mean for the current processor market players that see Auto as a major opportunity? While MediaTek may not pose a short term threat to Qualcomm, which has an early start and some major automotive partnerships, longer term MediaTek could have a significant impact on Qualcomm’s current dominance in the space. But as the market expands over the next 2-3 years, there is likely a good deal of room for all players, and the increased competition will be positive for the products and the overall market.
To be sure there are other suppliers in the market for automotive processors (e.g., NXP, TI, etc.) but none are targeting the high end SoC market that Qualcomm, and now MediaTek, are pursuing. We also see this collaboration as a major win for Nvidia, who needed a partnership with a volume chip producer to expand its own ambitions in the automotive market.
MediaTek does have one further advantage in that it has significant capability in wireless connectivity (e.g., 5G, WiFi, Bluetooth). Connectivity is becoming a critical necessity for advanced vehicles, and MediaTek can leverage this additional component to cement relationships with potential customers. But its competitors (e.g., Qualcomm, Samsung) also have such capability, so this is more of a “must have to compete”, rather than a truly advantageous asset.
Bottom Line: With this announcement, MediaTek is signaling that it no longer wants to be seen as a low cost commodity chip provider. It intends to move upscale and is putting the resources and partnerships in place to do so. It has been doing so in the mobile space for some time, and now is branching out to other emerging markets in which it can offer value. MediaTek already has working relationships with many of the infotainment and connectivity producers it wishes to court, so they will be expanding channels, rather than trying to build anew with this product announcement. This provides an advantage over brand new entrants, especially some of the potential China-based competitors. Still, they face stiff competition from bigger and more established players like Qualcomm, Samsung, Intel and even its new partner Nvidia that produces its own set of processors for the automotive market.
Of course MediaTek will need to prove its products are ultimately competitive to succeed. But we expect MediaTek to be successful and become a major player in high end automotive and other advanced markets as it grows its capabilities.
Jack Gold is founder and principal analyst at J. Gold Associates, LLC. With more than 45 years of experience in the computer and electronics industries, and as an industry analyst for more than 25 years, he covers the many aspects of business and consumer computing and emerging technologies. Follow him on Twitter @jckgld or LinkedIn at https://www.linkedin.com/in/jckgld.