MediaTek Unveils 2nm Smartphone Chip to Target Premium AI Market

Taiwan's MediaTek on Tuesday unveiled a new flagship smartphone chip manufactured using TSMC's most advanced 2-nanometre process, a strategic move to capture a larger share of the premium handset market. The announcement signals the company's intensified competition with U.S. rival Qualcomm, focusing on powerful on-device artificial intelligence features that command higher profit margins.

New Flagship Processors

MediaTek introduced two new mobile processors aimed at the high-end market. The first smartphones featuring these chips are expected to launch soon, according to the company.

• The Dimensity 9600 Pro is MediaTek's first chip built on Taiwan Semiconductor Manufacturing Co's cutting-edge 2-nanometre process. It includes a dedicated neural processing unit (NPU) for handling complex generative-AI applications directly on the device.
• The company also launched the Dimensity 9600M, which uses TSMC's 3-nanometre process and targets a broader segment of the flagship phone market.

MediaTek reported that the new NPU delivers a 51% improvement over the previous generation in processing a user's prompt before an AI model begins generating a response, though further details were not provided.

Market Strategy and Competition

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The launch is part of a broader effort to gain ground on Qualcomm in the premium Android phone space. JC Hsu, corporate senior vice president at MediaTek, acknowledged that the AI boom is straining supply chains and raising component costs. However, he noted that advanced hardware and new AI features are also making higher price tags more common for consumers.

"As the overall market moves to higher prices, I believe there is still room for us to increase our share of the flagship segment," Hsu said. The company has previously supplied chips to major Chinese smartphone brands including Xiaomi, Oppo, and Vivo.

Broader Expansion into AI

Beyond mobile processors, MediaTek is expanding its AI business into data centers and custom-chip products. The company's first AI accelerator, designed for a major U.S. cloud service provider, is slated to enter mass production in the fourth quarter of this year.

This expansion is supported by significant recent fundraising. MediaTek raised $3.9 billion last month through a convertible bond sale, which included a $3.5 billion investment from Nvidia and participation from Alphabet, a long-term partner in AI infrastructure.