Riding high on a fivefold increase in shipments of application processors in 2012 triggered by a robust growth of the mobile device market in China, MediaTek has been strengthening its deployment in 28nm process and has also increased the portfolios of its chipset solutions for tablets since the beginning of 2013, according to Digitimes Research.

As compared to rival companies, MediaTek has gained much of its competitive advantage not purely from pricing but rather through a high degree of product integration, shortened time to market development strategy as well as a faster product life cycle approach. Even though some key patents are controlled by other companies, MediaTek still accomplished a major breakthrough by ramping its shipments of application processors for smart mobile devices to 120 million units in 2012.

However, Qualcomm is expected to take on MediaTek in the China market soon by pushing sales of its Krait-based QRD (Qualcomm reference design) to local branded smartphone and tablet vendors.

But the chance for Qualcomm to dent a significant share from MediaTek is limited since the US-based chipset vendor is lagging behind the Taiwan-based rival in terms of supporting services, Digitimes Research believes.

Although Qualcomm has integrated its Krait CPUs to QRD solutions, the clock speeds of QRD solutions are much lower than other Krait processors designed for high-end devices, and therefore the QRD solutions do not boast strong competitive advantage over comparable MediaTek parts.

Additionally, MediaTek is strengthening its cooperation with major hardware brands, including Lenovo, Acer, Asustek Computer and Sony Mobile Communications for continual roll-outs of new smartphones and tablets that will result in a further increase of its shipments and profitability.

As a result, MediaTek is expected to ramp up its shipments of application processors to 200-220 million units in 2013, Digitimes Research estimates.