MediaTek announced a collaboration with Meta to develop its next-generation smart glasses chip. Since Meta has previously used Qualcomm chips for its two generations of smart glasses products, it is speculated that Meta’s expansion of chip suppliers is aimed at maintaining supply chain flexibility and reducing costs. MediaTek, in turn, is poised to leverage smart glasses to tap into opportunities within Meta’s VR/AR devices.

 TrendForce’s Insights:

1. Meta Expands Chip Collaboration Suppliers, Maintaining Product Development Flexibility and Potential Cost Reduction

In mid-November 2023, MediaTek hosted the overseas summit, Mediatek Executive Summit 2023, where it announced a collaboration with Meta to develop the next-generation smart glasses chip.

Meta’s first smart glasses, a collaborative creation with Ray-Ban in 2021, differ from the Quest series as they are not high-end VR devices but rather feature a simpler design, focusing on additional functionalities like music playback and phone calls.

In the fall of 2023, Meta introduced a successor product with significant improvements in camera resolution, video quality, microphones, and internal storage. This new device is designed to simplify the recording and live streaming process by integrating with Meta’s social platform. Additionally, the new product aligns with the trend of generative AI and incorporates Meta’s AI voice assistant based on Llama2 LLM.

Notably, the market has shown keen interest and discussion regarding MediaTek’s announcement on the collaboration with Meta, given that Meta’s previous two generations of smart glasses used Qualcomm chips, specifically the Qualcomm Snapdragon Wear 4100 for the older version and the AR1 Gen1 for the new version.

Analysis of Meta’s Motivation: Meta’s decision to collaborate with MediaTek may be driven by considerations of risk diversification among suppliers and overall cost reduction.

Firstly, Meta has been investing in the development of in-house chips in recent years to ensure flexibility in product development. Examples include the MTIA chip, disclosed in mid-2023, designed for processing inference-related tasks, and the MSVP, the first in-house ASIC chip for video transcoding, which is expected to be used in VR and AR devices.

Given Meta’s previous attempts, including collaboration with Samsung, to independently develop chips and move towards chip autonomy, the partnership with MediaTek can be seen as a risk mitigation strategy against vendor lock-in.

Secondly, considering that smart glasses, unlike the high-priced Quest series, are currently priced at USD 299 for both models, MediaTek’s competitive pricing may also be a significant factor in Meta’s decision to collaborate with them.

2. MediaTek Eyes VR and AR Device Market Opportunities Through Smart Glasses Collaboration with Meta

From MediaTek’s perspective, their focus extends beyond smart glasses to the vast business opportunities presented by Meta’s VR and AR devices. In reality, examining Meta’s smart glasses alone reveals estimated shipments of around 300,000 pairs for the older model. Even with the new model and the anticipated successor expected to launch in 2025, there is currently no clear indication of significant market momentum.

In practical terms, this collaboration with Meta might not contribute substantially to MediaTek’s revenue. The crucial aspect of MediaTek’s collaboration with Meta lies in strategically positioning itself in Meta’s smart headwear supply chain, challenging the dominance of the original chip supplier, Qualcomm.

Looking at global VR device shipments, Meta is projected to hold over 70% market share in 2023 and 2024. There are also reports of an updated version of the Quest device expected to be available in China in late 2024. If MediaTek can expand its collaboration with Meta further, coupled with the gradual increase in the penetration rate of VR and AR devices, significant business opportunities still lie ahead.

From an overall perspective of the VR and AR industry, the current design of headwear devices no longer resembles the early models that required external computing cores due to considerations of cost, power, and heat.

The prevalent mainstream designs are now standalone devices. Given that these devices not only execute the primary application functions but also handle and consolidate a substantial amount of data from sensors to support functions like object tracking and image recognition, VR and AR devices require high-performance chips or embedded auxiliary SoCs. This market demand and profit potential are compelling enough to attract chip manufacturers, especially in the face of the gradual decline in momentum in the consumer electronics market, such as smartphones.

The VR and AR market still holds development potential, making it a strategic entry point for manufacturers. This insight is evident in MediaTek’s motivation, continuing its market cultivation efforts after developing the first VR chip for Sony PS VR2 in 2022 and collaborating with Meta.

According to CNA’s news, the potential business opportunities in artificial intelligence have spurred major tech giants, with NVIDIA, AMD, Intel, MediaTek, and Qualcomm sequentially launching products featuring the latest AI capabilities.

This AI arms race has expanded its battleground from servers to smartphones and laptops, as companies hope that the infusion of AI will inject vitality into mature markets.

Generative AI is experiencing robust development, with MediaTek considering this year as the “Generative AI Year.” They anticipate a potential paradigm shift in the IC design industry, contributing to increased productivity and significantly impacting IC products.

This not only brings forth new applications but also propels the demand for new algorithms and computational processors.

MediaTek and Qualcomm recently introduced their flagship 5G generative AI mobile chips, the Dimensity 9300 and Snapdragon 8 Gen 3, respectively. The Dimensity 9300, integrated with the built-in APU 790, enables faster and more secure edge AI computing, capable of generating images within 1 second.

MediaTek points out that the smartphone industry is experiencing a gradual growth slowdown, and generative AI is expected to provide new services, potentially stimulating a new wave of consumer demand growth. Smartphones equipped with the Dimensity 9300 and Snapdragon 8 Gen 3 are set to be released gradually by the end of this year.

Targeting the AI personal computer (PC) market, Intel is set to launch the Meteor Lake processor on December 14. Two major computer brands, Acer and ASUS, are both customers for Intel’s AI PC.

High-speed transmission interface chip manufacturer Parade and network communication chip manufacturer Realtek are optimistic. The integration of AI features into personal computers and laptops is expected to stimulate demand for upgrades, leading to a potential increase in PC shipments next year.

In TrendForces’ report on November 8th, it has indicated that the emerging market for AI PCs does not have a clear definition at present, but due to the high costs of upgrading both software and hardware associated with AI PCs, early development will be focused on high-end business users and content creators.

For consumers, current PCs offer a range of cloud AI applications sufficient for daily life and entertainment needs. However, without the emergence of a groundbreaking AI application in the short term to significantly enhance the AI experience, it will be challenging to rapidly boost the adoption of consumer AI PCs.

For the average consumer, with disposable income becoming increasingly tight, the prospect of purchasing an expensive, non-essential computer is likely wishful thinking on the part of suppliers. Nevertheless, looking to the long term, the potential development of more diverse AI tools—along with a price reduction—may still lead to a higher adoption rate of consumer AI PCs.

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(Image: Qualcomm)

In TrendForce’s report on the self-driving System-on-Chip (SoC) market, it has witnessed rapid growth, which is anticipated to soar to $28 billion by 2026, boasting a Compound Annual Growth Rate (CAGR) from 2022 to 2026.

1. Rapid Growth in the Self-Driving SoC Market Becomes a Key Global Opportunity for IC Design Companies

In 2022, the global market for self-driving SoC is approximately $10.8 billion, and it is projected to grow to $12.7 billion in 2023, representing an 18% YoY increase. Fueled by the rising penetration of autonomous driving, the market is expected to reach $28 billion in 2026, with a CAGR of approximately 27% from 2022 to 2026.

Given the slowing growth momentum in the consumer electronics market, self-driving SoC has emerged as a crucial global opportunity for IC design companies.

2. Computing Power Reigns Supreme, with NVIDIA and Qualcomm Leading the Pack

Due to factors such as regulations, technology, costs, and network speed, most automakers currently operate at Level 2 autonomy. In practical terms, computing power exceeding 100 TOPS (INT8) is sufficient. However, as vehicles typically have a lifespan of over 15 years, future upgrades in autonomy levels will rely on Over-The-Air (OTA) updates, necessitating reserved computing power.

Based on the current choices made by automakers, computing power emerges as a primary consideration. Consequently, NVIDIA and Qualcomm are poised to hold a competitive edge. In contrast, Mobileye’s EyeQ Ultra, set to enter mass production in 2025, offers only 176 TOPS, making it susceptible to significant competitive pressure.

3. Software-Hardware Integration, Decoupling, and Openness as Key Competitors

Seamless integration of software and hardware can maximize the computational power of SoCs. Considering the imperative for automakers to reduce costs and enhance efficiency, the degree of integration becomes a pivotal factor in a company’s competitiveness. However, not only does integration matter, but the ability to decouple software and hardware proves even more critical.

Through a high degree of decoupling, automakers can continually update SoC functionality via Over-The-Air (OTA) updates. The openness of the software ecosystem assists automakers in establishing differentiation, serving as a competitive imperative that IC design firms cannot overlook.

According to anue’s news, during the recent MediaTek 2023 Summit, major IC design firm MediaTek held an overseas summit in the United States and announced a new collaboration with Meta. MediaTek will take charge of developing the chip for Ray-Ban Meta smart glasses, replacing the competitor Qualcomm’s Snapdragon AR1 Gen 1 chip.

Notably, in October 2023,  Meta launched the new generation of Ray-Ban Meta smart glasses. These feature the Qualcomm Snapdragon AR1 Gen 1 chip, a 12-megapixel camera, and 5 microphones for sending and receiving messages. It is the world’s first smart glasses with Facebook and Instagram live streaming capabilities, enabling the recording of high-quality videos.

MediaTek has long been dedicated to developing low-power, high-performance SoC. This collaboration with Meta focuses on jointly creating a custom chip specifically designed for AR smart glasses, meeting the requirements of lightweight and compact devices. The collaborative product, Ray-Ban Meta smart glasses, is expected to be launched in the future.

(Photo credit: MediaTek)

On November 6, 2023, MediaTek unveiled its latest flagship smartphone SoC, the Dimensity 9300. Benchmark data reveals that the Dimensity 9300 outperforms Qualcomm’s flagship chips in both CPU (multi-core) and GPU performance.

However, Qualcomm enjoys a strong brand reputation and recognition in the consumer market, making it a challenging task for MediaTek to capture the top market position for high-end SoCs in the Android camp with this chip.

TrendForce’s Insights:

1. Brand New Design Boosts Dimensity 9300 Benchmark Performance

Diverging from the conventional “big core + small core” architecture, MediaTek introduces a groundbreaking “4+4” design in the Dimensity 9300. This chip comprises 4 Cortex-X4 cores (clocking up to 3.25GHz) and 4 Cortex-A720 cores (running at 2.0GHz).

According to MediaTek’s official data, this new architecture delivers a 40% increase in multi-core peak performance compared to the previous-generation Dimensity 9200. Additionally, it achieves a 33% reduction in power consumption while maintaining the same level of performance.

In addition to its outstanding chip performance and energy efficiency, the Dimensity 9300 achieves a significant breakthrough in the field of AI. According to official data, powered by the seventh-generation AI processor APU790, the Dimensity 9300 achieves AI edge computing processing speeds up to 8 times faster than the previous generation. In practical terms, this means it can generate image content from text in less than 1 second.

Furthermore, through MediaTek’s exclusive memory compression technology, known as NeuroPilot Compression, it significantly reduces the memory footprint of AI Large Language Models (LLMs) on end-user devices. This enables smooth operation of LLMs with up to 1 billion, 7 billion, 13 billion, and even a maximum of 33 billion parameters on terminal devices.

2. Dimensity 9300 Outperforms, but Qualcomm Remains a Strong Contender

While Dimensity 9300 exhibits superior performance in both CPU (multi-core) and GPU compared to Qualcomm’s concurrent flagship Snapdragon 8 Gen 3 SoC, a consumer survey conducted by a well-known international tech product comparison website tells a different story.

Out of 1,833 valid respondents, even after being informed about Dimensity 9300’s better benchmark results, 946 people (representing 51.6% of respondents) still chose the Qualcomm chip with lower scores.

This is likely because major smartphone manufacturers have historically favored Qualcomm over MediaTek for their flagship devices. Qualcomm has built a stronger brand image and enjoys higher recognition in the market. Therefore, MediaTek faces a formidable challenge in its quest to capture the top spot for Android high-end smartphone SoC market share with Dimensity 9300.

Furthermore, since the current benchmark results are derived from engineering samples, and the ultimate products from smartphone manufacturers have not been officially released, it remains to be seen whether Dimensity 9300 can deliver the expected performance efficiency. The final verdict on its performance will depend on the adjustments and optimizations made by these manufacturers.

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• [News] MediaTek Unveils Dimensity 9300 AI Mobile Chip: Intensifying Competition in the Chinese Market

(Photo credit: MediaTek)