Examines the global and Chinese mobile phone baseband market in 2010

The “Global and China Mobile Phone Baseband (Baseband) Industry Research Report 2010” recently launched by the Shuiqing Muhua Research Center fully summarized the development trend of major mobile baseband manufacturers in 2010.

ST-ERICSSON, a merger of STMicroelectronics, EMP, and NXP's three top-tier baseband manufacturers, has shown no consolidation, but revenue has begun to decline. The decline rate is the largest in the mobile phone baseband manufacturers. The company has suffered losses for 13 consecutive quarters. The decline was mainly due to competition from Qualcomm, Texas Instruments and Infineon. Especially in the field of smart phones ST-ERICSSON lackluster, Qualcomm swept the world with a sweeping force, Samsung and Sony Ericsson's smart phones use 90% of Qualcomm's baseband. Nokia aggressively expanded the scope of its suppliers, using Infineon and Broadcom’s Nokia handsets to ship in large quantities in 2010, which squeezed ST-ERICSSON’s living space. For TD-SCDMA, ST-ERICSSON was squeezed by MediaTek.

Source: Shuiqing Muhua Research Center Spreadtrum took advantage of MediaTek's mistakes in 2010 and drastically seized MediaTek’s share in the cottage sector, resulting in a significant increase in shipments, a nearly 2-fold increase in revenue, and a substantial increase in operating profit. However, Spreadtrum also needs to consider future issues. MediaTek will not make mistakes forever. At the same time, the lack of 4G and smart phones has made it a little room for development.

MediaTek almost made a fatal mistake in 2010. The use of a QFN package led to a series of effects. MediaTek overestimated the SMT capability of mainland handset manufacturers. Fortunately, MediaTek adjusted in a timely manner, while the mainland SMT patch capacity was also increased by this stimulus, and finally Mediatek secured its position. However, MediaTek no longer has the ability to grow at high speed. The lack of 4G and smart phones in the same area as Spreadtrum leaves little room for development. The loss of top talent has also proved this point.

Qualcomm further consolidates its dominance in the CDMA and WCDMA fields, and has also consolidated its dominance in the field of smartphones. After Intel acquired Infineon’s wireless division, Qualcomm may enter Apple’s supply chain. If the definition of the smart phone is a bit harsh, Qualcomm is almost Intel in the PC world. With the exception of Apple, the CPUs of all mainstream top smartphones are Qualcomm. In 2010, Qualcomm also had to lower its figure in order to seize the market, and the price dropped slightly. Relying on the many years of cooperation with TSMC, the use of 65-nanometer and 45-nanometer technologies has led to a reduction in the price of Qualcomm, but the gross margin has increased. Qualcomm has added 700,000 12-inch wafer capacity to TSMC in 2011 because Qualcomm’s orders are already in 2012.

Although Texas Instruments is not favored by everyone, it is still good in 2010. Relying on the mass shipments of Nokia smartphones, Texas Instruments' high-priced products are stable and its RAPUYAMA has replaced the status of RAPIDOYAWE developed by Nokia and FREESCALE. The new generation of Nokia smartphones are all based on RAPUYAMA. Although the operating speed is not high, Nokia thinks it is enough and the cost is low enough. However, relying too much on Nokia, it also contains no small risk. The same is true of Nokia, too dependent on Texas Instruments is not safe, Nokia has been trying to use Qualcomm baseband in smart phones.

Freescale has basically withdrew from the baseband area and has gone all out to apply processors. The decline in performance is positive.

Infineon’s wireless division was acquired by Intel at the end of August 2010, completing the acquisition until the first quarter of 2011. Infineon fully blossomed in 2010, and the number one major customer, Apple, surged. A large amount of up-front investment with Nokia finally paid off, and shipments began to increase significantly. Infineon’s wireless division’s profits have increased even more, operating profit for the first three quarters of 2010 was 142 million euros, compared with 8 million euros in the first three quarters of 2009. However, taking into account that the mobile phone field needs to continuously invest a large amount of financial resources and manpower, especially in the face of Qualcomm this well-placed opponent in the 4G, 5G field, Infineon thinks better. Compared to Infineon’s automotive, industrial control and smart card divisions, the wireless sector’s profits are slim, so Infineon eventually sold the sector. Intel is seeking space for development outside of the PC. At the same time, it is very strong. It believes that it can compete against Qualcomm and buy Infineon’s wireless sector. In the short term, the division will also bring good profits to Intel. And Apple's big customer will not give up many years of partners so quickly, and there are many years of design architecture. In the CDMA field, Infineon does not have a corresponding product. Apple naturally uses Qualcomm.

Broadcom has a wide range of business distribution, many products, and insufficient investment in mobile handset baseband. It has been in a state of sluggishness for many years. However, in 2010, Broadcom had harvested many years ago in Nokia and Samsung, and shipments increased significantly. At the same time, Broadcom also actively deployed 4G. In October 2010, Beceem was acquired for US$316 million.

Marvell benefited from the growth of big customers RIM and the growth of smart phones, and its performance has increased dramatically. RIM began to decline in the face of competition from Apple, and Marvell had to consider how to develop new customers or increase the share of new customers.

For Morningstar Semiconductor, which has just been listed, although many people are optimistic, it will sooner or later face the difficulties of MediaTek and Spreadtrum. Morningstar’s high-profile mobile phone business only had approximately RMB220 million in revenue in the first three quarters of 2010.