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Qualcomm Led the Baseband Market with 800+ million Shipments in 2021

by Sravan Kundojjala | Apr 12, 2022

The global cellular baseband market continues to be dynamic. The market experienced significant market share shifts in 2021. Qualcomm, MediaTek and Unisoc gained market share while Intel, HiSilicon and Samsung LSI lost baseband share.

The baseband market grew approximately 20 percent to $31.4 billion in 2021, an all-time high revenue for the market. Thanks to 5G, the market saw a significant uplift in average selling prices (ASP), boosting the overall revenue. 5G baseband revenue grew 71 percent, accounting for two-thirds of total baseband revenue in 2021.

Qualcomm, MediaTek, Samsung LSI, Unisoc and Intel grabbed the top-five revenue share spots in the baseband market in 2021.

SA_Baseband_2021_Share

Qualcomm dominated the cellular baseband market with 800+ million baseband shipments and around 56 percent revenue share in 2021. First, the company benefitted from the first full year of iPhone impact. Qualcomm's X60 5G modem featured in iPhone 13 lineup and generated volume. Second, Qualcomm has established itself as the market leader in Android premium and high tier devices with its Snapdragon 8 and 7 series of chips. Finally, the company's strong traction in non-handset segments such as cellular tablets, fixed wireless access, automotive, IoT etc. helped further. Unsurprisingly, Qualcomm led the market by a wide margin.

MediaTek gained share with the help of its Dimensity 5G chips and Helio 4G chips. We estimate that MediaTek's 5G baseband shipments more than tripled in 2021 and boosted its ASPs dramatically. The company gained share in mid and low tier smartphone processors as the market leader Qualcomm shifted focus to 5G.

Unisoc regained 4G LTE baseband share with the help of its Tiger-branded chips and design-wins at tier-1 smartphone OEMs such as Samsung and Honor. The company has the potential to gain further LTE share through 2022. Strategy Analytics notes that Unisoc has a proven track record in capturing market share in mature technologies. However, we note that Unisoc yet to make a dent in the 5G baseband market. The company needs to accelerate its Tanggula-branded 5G chip ramp.

HiSilicon took a big hit, thanks to trade sanctions. The company's production partner TSMC stopped taking orders after September 15 2020. MediaTek and Qualcomm captured the share left by HiSilicon.

Samsung LSI lost share as its primary customer shifted orders to Qualcomm, MediaTek and Unisoc. Popular devices including the Galaxy S21 and A-series devices featured Exynos devices in 2021. Strategy Analytics believes that Samsung's new mid-range Exynos 1280 could bring it back into the game.

Intel lost share to Qualcomm as its primary customer Apple switched to 5G and adopted Qualcomm's chips. Apple acquired Intel's modem business in July 2019 and will field its first 5G baseband in 2023. We expect Qualcomm to take up to a $5+ billion revenue hit due to Apple's transition to in-house modem.

Cellular IoT baseband vendors ASR Microelectronics, Altair (Sony), Sequans and Nordic Semiconductor all saw strong traction. However, all IoT vendors saw their shipments limited by wafer supply constraints. ASR Micro saw almost four-fold shipment growth in 2021.

Looking forward, Strategy Analytics believes that the baseband market will continue to grow as the 5G cycle is still in its early stages. We expect an increased 5G shipment mix in 2022 to help vendors maintain their ASPs and revenue. In addition, increased supply from foundries TSMC and Samsung could alleviate supply constraints in 2H 2022. However, we believe that the 5G baseband market will inevitably face ASP pressure due to an increased mix of mid-range chips and competition.

We recommend baseband vendors exercise discipline in terms of pricing as the leading baseband vendors Qualcomm and MediaTek just started producing healthy margins. Qualcomm, for example, guided a 30 per cent-plus margins for its QCT semiconductor business through FY2024. In addition, on the strength of 5G, MediaTek saw its gross margins inching 50 percent. To maintain healthy margins, the baseband industry needs to balance pricing and product-mix in the next few years.

Strategy Analytics' Handset Component Technologies research service tracks the baseband market in detail (units, revenue and ASP). Please let me know if you would like to explore this topic further.

Sravan Kundojjala

@SKundojjala (Follow me on Twitter)

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