One early morning late last December, a line formed outside Taipei's Syntrend Creative Park, a shopping mall catering to tech enthusiasts. The people were waiting in line to buy Vivo's latest flagship smartphone, the X100. According to the official statement, sales in the first three days were ten times that of the previous generation, the X90.

"I'm switching over from Xiaomi because I heard Vivo phones take better pictures," says one forty-something office worker.

The year 2023 was a bad one for smartphones. For a Chinese phone brand to do so well in Taiwan was nothing short of incredible. 

(Source: Vivo)

A month before it came to the Taiwanese market, the X100-series was making headlines in China, where first-day sales reached 740% of the prior generation. This is good news for MediaTek, as the X100 is the first flagship model to run on MediaTek's own flagship processor, the Dimensity 9300.

CEO Rick Tsai (蔡力行) stated in December that the success of the Dimensity 9300 surpassed both MediaTek and Vivo's expectations.

Camera capabilities surpass Huawei

Part of its success is due to its powerful camera features. Vivo has placed great emphasis on its smartphones' cameras in recent years. In 2020, Vivo worked with Zeiss to establish the "Vivo Zeiss Imaging Lab" to innovate mobile imaging technology for smartphones. The X100-series incorporates Zeiss's advanced coating technology to reduce reflection on lenses by 50% and decrease glare, making the phone better able to take crisp and beautiful photos of a sunset without any issues.

The problem was that this raised the cost of the color filters from a dime each to five U.S. dollars. "After Huawei failed to make the cut, Vivo became the number one Chinese brand in this field; even Xiaomi uses it as a benchmark," says a senior manager at a mobile phone optics company. 

Vivo has developed imaging technology in recent years and cooperated with Zeiss. (Photo: Ming-Tang Huang)

But as the reigning champion of the Chinese market, Huawei was not yet down for the count. In September, it came out with the Mate 60 Pro, powered by China's own 7nm chip. Patriotic fervor kicked in. According to a report by the China Academy of Information and Communications Technology (CAICT), smartphone sales in September showed a 60% increase year-over-year.

Powered by its self-developed HarmonyOS, Huawei's smartphones were becoming a more serious threat to iPhones than Android devices. Eddie Han (韓文堯), senior analyst at Taiwan-based consultancy Isaiah Research, observes that the iPhone 15 began selling at discount prices on Singles' Day in China, a full two months ahead of schedule.

In comparison, the Vivo X100 and Xiaomi's 14th generation flagship model based on Qualcomm’s Snapdragon 8 Gen 3 chips were not very much affected;. Tthey flew off the shelves. Han points out that the unexpected success of these models has led Vivo to place emergency orders with MediaTek and Xiaomi to stock up on mobile camera components. 

Close partnership with prestigious brands

A semiconductor analyst remarks that Huawei's re-emergence poses a grave threat to MediaTek and Vivo. "If high-end phones based on the 4nm Dimensity 9300 chips should underperform compared to Huawei's 7nm phones based on Kirin 9000s chips by SMIC, it would be a catastrophe."

Aware of the danger, Vivo spared no expense in building its latest flagship. The X100-series was designed to feature the best camera and the most advanced processor. But in China, it was priced nearly the same as its predecessor, which meant that Vivo was almost selling them at a loss. Vivo even offered a program in Taiwan where one could trade in one’s old Vivo for a discount of up to NT$10,000.

This had the effect of temporarily alleviating the threat posed by Huawei. The analyst feels that MediaTek's Dimensity 9300 has shown that its performance with regard to photography, AI, and gaming is far beyond the capabilities of the 7nm Huawei. "The partnership between MediaTek and Vivo has been a considerable success."

The Dimensity 9300's prowess  is not limited to running generative AI. To MediaTek, it is a sterling example of a deep and fruitful partnership. Currently, many smartphone brands such as Apple and Oppo are experimenting with self-developed chips in their phones, which can improve user experience in terms of gaming and photography.

The partnership of MediaTek and Vivo shows the possibility to the market. (Photo: Ming-Tang Huang)

How MediaTek and Vivo learned to work together was a test of the two companies' ability to cooperate and collaborate. 

The proof of their achievement is the X100-series. The processor is built with patented optical image stabilization (OIS) technology and features the innovative "all big core" architecture that allows Vivo to maximize chip performance on its existing hardware platform. "Without in-depth synchronization between the design teams, the result might not have been so stellar," says the analyst.

MediaTek's next target: AI computers 

The success of the Dimensity 9300 has pulled MediaTek out of the slump that it was in for the last couple of years. Its stock price grew from NT$636 at the beginning of 2023 to surpass 1,000 by  year's end.

"MediaTek's success story has been a teachable moment for the market," opines Charlie Chan (詹家鴻), Head of Greater China Semiconductor Research at Morgan Stanley in his report. It is also proof that MediaTek has the research power to match its manufacturing capacity.

The report is also optimistic about MediaTek's growing market share as it pertains to flagship smartphones, which is forecast to increase from 20% in 2023 to 30-35% in 2024. Revenue from flagship processors is also predicted to double, from US$1 billion to 2 billion.

MediaTek's potential in boosting AI in edge computing scenarios is not limited to smartphones. 

In his report, Chan predicted that Nvidia will likely announce its new AI chip during Computex this year. Based on past experience, MediaTek will likely play a major role.

The Dimensity 9300 was an instance of MediaTek and Vivo working hand-in-hand to bring users the best smartphone experience. The popularity of Vivo X100 demonstrates the inevitability of 4nm microprocessors, as MediTek sails towards the next blue sea of opportunity that is. Generative AI.

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Translated by Jack Chou
Edited by TC Lin
Uploaded by Ian Huang