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Qualcomm and MediaTek Enter the Cloud AI Space

As the smartphone market experiences stagnation in global sales, two technology giants, Qualcomm and MediaTek, are redirecting their age-old rivalry into an emerging sector — cloud AI chips. The shift is seen as both companies strive to capitalize on new growth opportunities in a market that continues to expand, despite their traditional mobile sales plateauing.

In 2024, MediaTek commanded a notable 37% share of the smartphone application processor market, leading Qualcomm, which held 27%. Together, these two entities accounted for over 60% of the shipments, setting the stage for a fierce competition in the cloud AI domain. As they pivot towards cloud computing chips, the focus now rests on how each will navigate this shifting landscape.

New Strategies Unveiled at COMPUTEX 2025

Both Qualcomm and MediaTek recently outlined their strategic visions for cloud AI ASICs at the COMPUTEX 2025 event. The announcements highlight their intentions to join Nvidia's NVLink Fusion consortium, positioning themselves to contend with the established players in high-performance computing (HPC).

MediaTek's Strategy:
MediaTek is pursuing an aggressive strategy centered around speed and strategic partnerships. Utilizing Arm reference designs and leveraging TSMC's advanced manufacturing nodes, the company has fortified its production capabilities, making strides in smartphones and Chromebooks. In its bid to penetrate the cloud AI sector, MediaTek has enrolled in Nvidia’s DGX Spark GB10 project and collaborated with Google for Tensor Processing Unit (TPU) development.

The company has also showcased its 224G SerDes technology, highlighting its robust in-house interconnect capabilities. This strategic positioning grants MediaTek a first-mover advantage in several initiatives that align with major technology partners like Nvidia and Google.

Qualcomm's Approach:
Contrastingly, Qualcomm emphasizes a strategy based on depth and technological integration. Following its acquisition of Nuvia in 2021, Qualcomm has embedded its Oryon CPU as a crucial component in its proprietary intellectual property suite. Its recent acquisition of Alphawave has augmented its capabilities in SerDes technology and high-speed interconnect systems, creating a more integrated technological stack.

Additionally, Qualcomm maintains dual foundry partnerships with TSMC and Samsung, enhancing its flexibility in production. Its Cloud AI 100 and Ultra AI accelerator cards are already operational in edge inference servers, and the company is gearing up to deploy chips tailored for large language model training and inference.

A Rivalry that Will Defined AI Competition

As both companies harness their respective strengths, analysts suggest that Qualcomm’s depth of technology and MediaTek’s speed could lead to substantial competition in the cloud AI ASIC market. According to Joyce Chen, a research analyst at DIGITIMES, the critical factors to monitor will include their cost management strategies, the ability to meet surging demand for computational resources, advanced manufacturing capacities, and partnerships with cloud service providers.

The rivalry that started in the smartphone market is now critical in shaping the future of artificial intelligence hardware. While MediaTek strives for speed and early market entry, Qualcomm bolsters its established technology foundation, creating a dynamic duopoly that could define the next chapter of AI chip competition. Both companies are set to influence the landscape, with significant implications for developers and consumers in the growing domain of artificial intelligence.