MediaTek Dimensity 9400 Faces Supply Shortages Amid High Demand

MediaTek Inc. has announced that its latest 5G flagship chip, the Dimensity 9400, has seen higher-than-expected adoption from mainland Chinese brands since its launch earlier this month. The increased demand has led to supply shortages, prompting MediaTek to expand its collaboration with TSMC for production using advanced 3nm technology.

A key focus of the upcoming earnings conference on October 30 will be the sales dynamics of the Dimensity 9400. Analysts suggest that if demand continues to thrive, the increased production capacity could enhance MediaTek's shipment forecasts for the current quarter and extend the visibility of its orders. This also benefits TSMC by maintaining high utilization of its advanced manufacturing processes.

The Dimensity 9400, manufactured using TSMC's second-generation 3nm process, is designed to deliver improved performance and reduced power consumption, enabling robust generative AI applications. Compared to its predecessor, the Dimensity 9300, single-core performance is up by 35%, while multi-core performance has increased by 28%. Additionally, the power consumption of the Dimensity 9400 is 40% lower than that of the previous generation, offering users longer battery life.

Initially, MediaTek approached production cautiously due to a slowdown in consumer electronics demand in mainland China. However, with substantial orders flowing in from major smartphone brands such as OPPO, Vivo, and Xiaomi, demand has exceeded expectations. This surge in orders, coupled with Qualcomm's ongoing patent licensing disputes, has significantly boosted sales momentum for the Dimensity 9400, leading MediaTek to ramp up production to meet substantial customer demand.

Currently, the average selling price (ASP) of the Dimensity 9400 is approximately $150, notably lower than Qualcomm's new flagship 5G chip, the Snapdragon 8 Elite, priced at $200. This price advantage has driven strong demand from OEMs in China. As the Dimensity 9400 continues to perform well in the market, it is poised to contribute positively to MediaTek's fourth-quarter results, defying seasonal trends.

Looking at operational performance, MediaTek had previously projected consolidated revenue for the third quarter to be between NT$123.5 billion and NT$132.4 billion, reflecting a quarter-on-quarter decrease of 3% to an increase of 4%. The actual reported revenue was NT$131.814 billion, landing within the upper range of the forecast, with a quarterly growth of 3.6%.