MediaTek will see its smartphone-chip shipments fall below 100 million units in the first quarter of 2017 and rebound only slightly to 110-120 million in the second quarter, according to industry sources.

MediaTek shipped over 480 million units of smartphone solutions in 2016. The company might struggle to post smartphone-chip shipment growth in 2017 due to disappointing results during the first half of the year, said the sources.

MediaTek has seen its major customers including Meizu, Xiaomi, Oppo and Vivo shift a portion of their smartphone AP orders to rival Qualcomm, the sources indicated. Despite new orders placed by Samsung Electronics, the loss of orders from China is hurting MediaTek's overall shipments of smartphone solutions, the sources said.

MediaTek has been defending its share of the smartphone application processor (AP) market since the latter half of 2016, and the efforts will become more difficult in 2017, the sources said.

According to Digitimes Research, Qualcomm will manage to grow its share of China's smartphone AP market above 30% in the first quarter of 2017, while MediaTek's market share will drop below 40%.