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Intel and MediaTek are sort of rivals. They both make processors for a range of consumer electronics. But Intel specializes more in computing, while Taiwan-based MediaTek does a lot of work for mobile phones, including 5G cellular. The two companies said November 25 they will join forces in making processors to power modems in 5G notebook PCs for release by 2021.
“Together, we know Intel and MediaTek can bring the best computing and connectivity experiences to the next generation of PC platforms,” Intel said in an e-mail. “These synergies combined with a shared vision allow us to capture the upsides without fostering competition.”
Each side needs the other now to get out of their own straits, analysts say, though they caution of a small, slow-growing market for 5G PC modems. Intel is losing modem technology personnel and faces an ongoing shortage of processors for core PC clients. MediaTek would hope to undo the dominance of Qualcomm in cellular chips, they say.
“It’s hard to say at this point exactly how much technology sharing there will be between the two,” says Ishan Dutt, an analyst with the market research firm Canalys in Singapore. “It also seems like a strategic partnership to help counter Qualcomm’s position within the segment on the back of the 5G notebook they announced with Lenovo earlier this year.”
Two chipmakers lay aside competition to chase a fragile market segment
Intel will come up with specs for a modem to be “developed and delivered” by MediaTek, the November 25 statement says. Intel will add “optimization and validation” as well as do system integration and offer support for outside companies that make these modems, it says.
Risk of one side learning their partner’s secrets is unlikely as both will share intellectual property rights and resources, says Pan Chien-Kuang, senior industry analyst with the Market Intelligence & Consulting Institute in Taipei. “There will be virtually no competition between them in this regard,” Pan says. Intel’s central processors normally land in PCs anyway, he adds, and MediaTek sells mainly to smartphones.
Both developers are taking a risk on 5G laptops. Users of notebooks with 5G modems would probably need to pay their telecom firms extra for the “always on” feature common among smartphones, as they do now with today’s 4G/LTE technology, Pan says. Most users are expected to opt out. “5G-enabled notebook PCs will be more for the niche market instead of the mass market in the short run,” Pan says.
Materials for 5G laptop modems cost more than 4G counterparts, the analyst adds.
Expect little consumer pickup within three years, Dutt says, pointing to the “relatively limited adoption of LTE connected notebooks” and questions about how telecom carriers will price 5G services. Canalys, he says, “views it as a building block within the wider goal of expanding the 5G ecosystem and use-cases.”
Intel sees momentum from 5G as a “premium category”, the company says for this post and reports “strong interest” from its own customers.
Intel, MediaTek posture to improve market positions
Intel needs a pickup after losing 2,200 smartphone modem staff people to Apple in mid-2019, Pan says. The $1 billion acquisition came with patents and equipment. Apple at the time quoted Intel CEO Bob Swan saying the deal would “enable us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created.” Intel is still smarting too from a shortage of central processing units for the world’s top PC developers, a threat to revenue growth.
“Intel is lacking human resources for subsequent 5G chip development and will not launch own 5G standalone modem chips,” Pan says.
MediaTek for its part has tried at least since 2018 to diversify away from smartphones–sales of which began leveling off last year—into making chips for connected devices, televisions and automotive electronics. The tie-up on 5G modems means MediaTek has found another market, Pan says. An entry into 5G laptops would advance that diversification.
The Taiwanese firm’s chief cell chip rival Qualcomm formed a tie-up with Lenovo this year to make a 5G laptop, adding impetus for the Intel collaboration. Qualcomm leads MediaTek in the world cellular baseband market, tech research firm Strategy Analytics says. Qualcomm had a 43% share in the second quarter, leaving MediaTek in third place, after HiSilicon, with a 14% share, the research firm says.
Qualcomm ranks first by developing processors for a wide range of phone models and keeping its own technology updated, Informa Telecoms & Media says.
A well-received laptop modem would help MediaTek move ahead in 5G market share. “On this Intel-MediaTek partnership, I think it’s a case of companies coming together to help build an ecosystem for a new segment,” Dutt says.
MediaTek logo is seen displayed on a smartphone.
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