MediaTek Pushes into Premium Phone Market with New AI Chips
MediaTek has introduced two new processors designed to handle complex artificial intelligence tasks directly on smartphones, aiming to challenge established rivals in the high-end handset segment.
Taiwan-based chip designer MediaTek has unveiled its latest mobile processors, marking a significant step in its strategy to compete in the premium smartphone market. The new chips, the Dimensity 9600 Pro and the Dimensity 9600M, are specifically engineered to run advanced AI features locally on the device. This approach allows for more complex generative AI applications without relying entirely on cloud processing, a trend that is becoming increasingly important for modern smartphones.
According to reporting from GN technics/mobile (en-US), these new processors represent a direct challenge to Qualcomm, the dominant player in high-end mobile chipsets. By targeting the flagship segment, MediaTek aims to capture higher profit margins associated with premium devices. The company has already supplied chips to major manufacturers like Xiaomi, Oppo, and Vivo, and expects to see phones powered by these new processors hit the market soon.
New manufacturing process boosts performance
The Dimensity 9600 Pro stands out as MediaTek’s first mobile processor built using the 2-nanometre manufacturing process from Taiwan Semiconductor Manufacturing Company. This cutting-edge technology allows for more transistors in the same space, generally leading to better performance and efficiency. The company also introduced the Dimensity 9600M, which uses the 3-nanometre process to target a broader range of flagship smartphones. While the 2-nanometre chip is positioned for the very top end, the 3-nanometre variant offers a balance of performance and cost for a wider market segment.
A key feature of both chips is the dedicated neural processing unit, or NPU. MediaTek claims this hardware delivers a 51% improvement in prompt processing speeds compared to the previous generation. This means the time between a user asking a question and the AI model starting to generate a response is significantly reduced. However, the company did not provide detailed methodology for this measurement, so independent verification of these speed claims remains pending.
Rising costs and premium pricing
JC Hsu, senior vice president at MediaTek, noted that the company is working with handset makers to mitigate the impact of rising component costs on consumers. The current boom in AI is placing pressure on supply chains, driving up the price of essential parts. Despite these challenges, Hsu believes that the shift toward higher-priced devices creates an opportunity for MediaTek to gain more share in the flagship segment. He pointed out that as the overall market moves to higher price points, there is still room for growth.
The trend toward higher prices is evident in recent product launches. For example, Apple’s new foldable iPhone, announced last week, is priced at up to $3,199 in the United States for its highest-storage model. This pricing strategy reflects a broader industry shift where manufacturers are pushing consumers toward more expensive devices to support the inclusion of advanced AI hardware. MediaTek sees this as a chance to compete effectively against higher-cost rivals.
Expanding beyond mobile devices
MediaTek is not limiting its AI ambitions to smartphones. The company is developing data-center and custom-chip products to meet the growing demand for AI infrastructure. Its first AI accelerator designed for a major U.S. cloud service provider is expected to enter mass production in the fourth quarter of this year. This expansion allows MediaTek to diversify its revenue streams and reduce its reliance on the mobile market alone.
To support this growth, MediaTek recently raised $3.9 billion through a convertible bond sale. The offering included a $3.5 billion investment from Nvidia, with Alphabet also participating. Alphabet has maintained a long-term partnership with MediaTek in AI infrastructure, and this new investment underscores the company’s broader push to build a strong position in the growing AI semiconductor market. The influx of capital provides the resources needed to scale its new product lines and continue its competitive push against established players.
