Qualcomm and MediaTek are eyeing your car in the new 5G chip battlefield

Recently, a piece of news has once again attracted everyone's attention to MediaTek. As a well-known semiconductor company in the world, MediaTek has indeed been somewhat low-key in the past six months. Just when everyone was speculating whether MediaTek was brewing a new flagship chip for mobile phones, a report from Taiwan Commercial Times unveiled the mystery of MediaTek's new business.

As the market for autonomous driving and new energy vehicles continued to grow substantially, automotive chips have been in short supply. On the one hand, the production capacity of semiconductor chips has been limited by the impact of the epidemic and other factors, and production cuts have occurred frequently. On the other hand, the demand for automotive chips has surged beyond the expectations of most semiconductor manufacturers. There are not many companies capable of supplying high-specification automotive chips, and these are basically not their main business.

In the field of high-performance automotive chips, the main suppliers are semiconductor companies such as Intel, Nvidia, Qualcomm, and AMD. It can be seen that they are basically traditional semiconductor giants, which have entered the automotive chip market with rapid iterations using traditional technological advantages. Of course, friends who are familiar with the semiconductor market should have noticed the absence of a giant - MediaTek.

MediaTek is here

As a company that has always maintained its position in the top five in global semiconductor chip supply, and even once entered the top three, most ordinary people outside the semiconductor industry may only have the impression of MediaTek on the Dimensity chips used in mobile phones. In fact, MediaTek's semiconductor chip business covers a wide range, and many digital products you have used may have chips from MediaTek.

For example, AirPods, which has been ranked first in TWS headset sales, uses H-series chips from a subsidiary of MediaTek (by the way, the chips used in the world's best-selling knockoff AirPods also come from this company). MediaTek's ability to compete with Qualcomm is not only based on mobile phone chips, otherwise during the period when MediaTek was completely suppressed, the company would probably have been out of business, and it would be unlikely to invest heavily in the development of a new generation of Dimensity series chips to reverse the downward trend.

With a firm foothold in the mobile phone market, MediaTek naturally put its main efforts into another rapidly growing market - automotive chips. As mentioned at the beginning, with the popularization of new energy vehicles and smart cockpits, coupled with the use of autonomous driving, assisted driving and other systems, the number of automotive chips has increased sharply. According to forecasts, the number of automotive chips in the world will increase to 128.5 billion by 2025, an increase of more than 200% from 2022.

In 2021 alone, the global market size of automotive chips has exceeded US$50 billion. According to forecasts, by 2027, the global automotive chip market size will be close to US$100 billion. With such a huge market, I am afraid that no semiconductor manufacturer will not be tempted.

Image source: Infineon

Therefore, MediaTek started to layout the automotive chip market five years ago, and finally successfully put it into production recently and obtained the cooperation of some automobile manufacturers. According to reports, MediaTek's automotive chips have entered the supply chain of European and Asian automobile brands, and have entered the mass production and shipment stage, and will usher in a significant increase in shipments in 2023.

Currently, MediaTek’s share in the automotive chip field is still very limited, but the entry of this semiconductor chip giant will obviously arouse the vigilance of several other companies. This already turbulent market is likely to usher in another turmoil.

What is MediaTek’s goal?

Although MediaTek's entry into the automotive chip market was only recently disclosed, it had already made its initial foray into the automotive market five years ago, but its main business at the time was not the main control chip, but some supporting automotive chips, such as sensors, car recorders, etc. MediaTek's financial report disclosed that 5% of its total revenue came from automotive product lines and special application chips. Although the proportion is not high, the growth prospects are considerable and it is expected to become a new major revenue growth point.

According to reports, the chips shipped by MediaTek this time are 5G chips. Perhaps everyone will think of the 5G chips on mobile phones. In a sense, it is indeed a product. Currently, MediaTek's automotive 5G chips are mainly based on the Sub-6 frequency band, which is also the mainstream 5G frequency band in China. However, MediaTek said that the Sub-6 frequency band 5G automotive chips are only the main products at present, and 5G chips using millimeter waves will be launched soon.

There are two main 5G frequency bands, one is the Sub-6 frequency band and the other is millimeter wave. The earliest 5G networks built in China are basically Sub-6 frequency bands. Since 2020, millimeter wave version of 5G base stations have been gradually built, but the progress is not fast. At present, only first- and second-tier cities and some urban central areas and high-tech zones have completed coverage.

The main difference between the two frequency bands is that the Sub-6 band can be built by modifying existing 4G base stations, while millimeter waves require brand new 5G base stations to support them, and the coverage range is smaller than the Sub-6 band 5G base stations, and the cost is ten or even a hundred times that of the former.

Since they are all 5G, why do we need to build a millimeter wave version? Simply put, the various 5G applications you see in popular science videos, such as drone navigation, ultra-low latency games, and autonomous driving assistance, are all functions that can only be achieved by the millimeter wave version of the 5G network. In addition to the increase in bandwidth compared to 4G, the 5G in the Sub-6 frequency band has almost no other difference. This is why some people complain that 5G is no different from 4G in use.

Although the Sub-6 frequency band is called the "youth version of 5G", it is currently the 5G network with the widest coverage due to its simple deployment and low cost. Most of the 5G networks in China are in the Sub-6 frequency band. Therefore, the 5G chips in the Sub-6 frequency band are more suitable for devices with a wide range of mobility, such as cars. There is no need to worry about switching to a 4G network with a lower bandwidth because of driving out of coverage.

Considering that the current demand for car networking is mainly for entertainment and OTA upgrades that do not require low latency, Sub-6 5G chips can already meet most of the needs. Subsequent millimeter wave 5G chips are obviously prepared for higher-level in-vehicle technology applications, such as the aforementioned autonomous driving assistance. In the future plan for autonomous driving, the system is generally divided into two parts, one is the AI ​​driving system in the car, and the other is the urban traffic AI system.

The core of the former is the high-performance AI chip on board, which analyzes and feedbacks the information obtained by the on-board sensors within milliseconds, and controls the car to complete the processing and response to emergencies in a very short time. The other part of the urban traffic AI system transmits information to the car in real time through sensors on both sides of the street and the urban traffic management system, assisting the on-board AI system to predict road conditions and pedestrian status, and further enhance the safety of autonomous driving.

So how can the urban transportation system communicate with vehicles in real time with low latency? Everyone should have thought of it, that is, the millimeter wave 5G network mentioned earlier. Therefore, the Sub-6 5G chip is just a test of MediaTek, and the subsequent millimeter wave 5G chip is the golden key to its entry into the autonomous driving market.

In the field of 5G chips, only MediaTek can compete with Qualcomm. Another giant in the 5G field has temporarily withdrawn from the market for some reason. Therefore, the automotive 5G chips in the next few years will be a new battlefield for Qualcomm and MediaTek. In addition to 5G chips, the two sides are expected to compete in areas such as central control chips. Qualcomm's biggest rival has already appeared.