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MediaTek Eyes Premium Android Phone Market With New 5G Chip

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Chip designer MediaTek Inc on Thursday released a new 5G smartphone chip that it hopes will be used in premium-priced Android smartphones, a market Qualcomm Inc currently dominates.

The Hsinchu, Taiwan-based company said its new Dimensity 9000 chip will be the world’s first to use its manufacturing partner Taiwan Semiconductor Manufacturing Co’s “N4″ chipmaking process, which helps makes chips smaller and faster. MediaTek said it will also be the first smartphone chip to feature a powerful new computing core from Arm Ltd called the Cortex X2.

Along with Qualcomm and Samsung Electronics Co Ltd, MediaTek is one of only three firms in the world that makes 5G smartphone chips. The fourth major player – Huawei Technologies Co Ltd, which also made its own phones – was forced out of the market by U.S. sanctions.

Huawei’s exit set off a scramble by Android smartphone makers to capture market share vacated by the Chinese brand. MediaTek already counts many of the contenders for that market share, such as Xiaomi Corp, Oppo and Vivo as customers, but many of those brands use MediaTek for their low and mid-tier devices and rely on Qualcomm for higher-end models.

David Ku, MediaTek’s chief financial officer, said the 9000 chip was the first in what will be a series of chips aimed at persuading those customers to switch to using MediaTek in their flagship devices.

“We need to have a very strong army to march into the segment,” Ku told Reuters. “One product is not enough – this is our starting point.”

MediaTek hit $10 billion in revenue for the first time last year, and Ku said it expects to hit $17 billion in revenue this year. He said that while 4G smartphone chips sometimes sold for $10, 5G chips can sell for $30 to even $50.

“The No. 1 driving factor is really the much higher (average selling price) due to the 4G to 5G transition,” Ku said.

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