In its ongoing jostling among chipset suppliers, Samsung may soon give Taiwanese firm MediaTek a larger share of Galaxy phone processor orders – with discounted pricing as an enticement.
According to recent rumors, MediaTek hopes to secure more business from Samsung’s budget and the mid-range Galaxy A series in particular. This segment features Samsung’s highest shipment volumes but lowest per-device profit margins.
So MediaTek stands to gain greater scale and influence for its mobile SoCs by aggressively pricing them. And Samsung could flex its supply chain leverage to reduce input costs in a highly competitive portion of the market.
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It’s a tactic with potential ripple effects too if Qualcomm feels pressure to lower prices in response. However, Samsung’s lucrative exclusivity arrangement with Qualcomm around customized “Snapdragon for Galaxy” chipsets limits how much business MediaTek can realistically capture on the premium end.
Likewise, after only recently re-establishing its Exynos brand for flagships like the Galaxy S24 line, Samsung seems unlikely to add a third option to the high-end mix either.
But for the cost-conscious A series where margins are thinner, expect MediaTek and Qualcomm to ramp up their bidding war for Samsung’s valuable partnership. With processors representing one of the priciest components, even minor discounts could impact budgets significantly when multiplied over tens of millions of units.