MediaTek designs and TSMC manufactures, a winning relationship in the semiconductor world

In general, when we talk about the chips that come inside our computers or smartphones, we tend to think of certain companies as well. AMD and Intel in the field of computers, for example, as well as MediaTek and Qualcomm in the field of mobile chips. This sometimes leads to the belief that these chips are manufactured entirely by these companies, but the reality is that the semiconductor industry is a bit more complex.  

MediaTek chips, for example, are produced in one of the most advanced manufacturing processes by another Taiwanese company called Taiwan Semiconductor Manufacturing Company –Better known as TSMC–. Although it may seem counterintuitive, this apparent division has become one of the strongest points of MediaTek, TSMC and even Taiwan.  

An overview of the industry 

The semiconductor industry is unique in many ways. When we think about the devices we use every day, brands such as Amazon, Google, Samsung or Xiaomi, among many others, usually come to mind. Although that is the brand we see, the truth is that these devices are assembled with components from other companies. A phone like the Samsung A32, for example, has a Samsung OLED display, but uses a MediaTek Helio G80 chip. 

This is similar to what happens in the chip field. Major brands like AMD, Nvidia, MediaTek, and ARM produce some of the most advanced chips on the market, but curiously none of them have factories of their own. Many of these chips are manufactured by a single company: the aforementioned TSMC.  

Chip manufacturing is one of the most advanced processes today, starting with grains of sand and ending with sheets of silicon - commonly called wafers - that process all of our current information in the form of CPUs and GPUs.

A TSMC chip factory in Taiwan. Image: Wikimedia

Not surprisingly, then, the cost of such a factory is quite high. According to figures from the same TSMC, the cost of building a manufacturing plant for advanced chips is estimated to be around $ 20.000 billion. These chips have components so small that their manufacture is measured in nanometers - a nanometer is one billionth of a meter. that is, they are approximately 100.000 times thinner than a human hair.  

TSMC's business model is to receive customer chip manufacturing orders, which are then manufactured and delivered a few months later. MediaTek can order, for example, 100.000 silicon sheets with Dimensity chips, which are then manufactured and delivered in accordance with all MediaTek specifications. 

This approach has several advantages. Given the complexity of chip manufacturing, the fact that TSMC is dedicated solely to production means that it can focus all its efforts on having more plants and improving its manufacturing processes. On the MediaTek side, the company can focus on designing ever-better chips without having to invest in dedicated talent and expensive manufacturing plants, obviously without sacrificing chip performance. 

In fact, TSMC produces chips for rival brands - like AMD or Nvidia - but that have big differences in performance. This proves that, in many cases, chip design is more important than manufacturing, and hence the importance of MediaTek being able to focus squarely on the design and new functions of its chips.   

Since the beginning of MediaTek 

It is well known that TSMC and MediaTek share their home country: Taiwan. However, the relationship between the two companies also goes back many decades. In Taiwan there is an institute called Industrial Technology Research InstituteTSMC was born from this institute in 1987 and UMC –United Microelectronics Corporation– in 1980. MediaTek was born in 1997 as an independent division of UMC.  

At first, MediaTek was focused on creating CD and DVD players, which by the late 90s and early 2000s were in high demand. These readers required basic processing chips, and MediaTek also designed these components, which in turn were manufactured by the nascent TSMC. When MediaTek entered the phone market in the mid-2000s, its chips continued to be based on the TSMC manufacturing. 

An MT1389DE chip, created for DVD players. Image: Wikimedia  

With the growth of the connected device market in the late 2000s and into the past decade, MediaTek-designed chips became a fundamental pillar for expanding technologies such as smartphones. Throughout all of its history, MediaTek products have been characterized by their competitive prices and the high performance of their designs, which are then produced by TSMC.  

Today MediaTek has become the number one supplier of phone chips smart, and this would not have been possible without the close relationship between MediaTek and TSMC. In the same way, MediaTek is today TSMC's third largest customer, driven by the connectivity needs brought by the pandemic and the new 5G networks. In the same way, brands like Xiaomi, Oppo, Samsung and Realme trust MediaTek to provide some of the most advanced chips on the market. 

Semiconductors and connectivity 

In today's landscape, few industries are as important as semiconductors. After all, our daily lives are largely dictated by the processing power that chips give us. Phones, routers, televisions, smart watches, computers, and Chromebooks, among many others; they all work thanks to semiconductors. 

MediaTek has managed to rise to the top in the mobile world and stay at the forefront of this development thanks to partners such as TSMC, with whom they can offer chips like the Dimensity 1200. The countries of the world are on the verge of entering a new era of connectivity thanks to technologies such as 5G, and this development could not occur without actors such as MediaTek and TSMC, which provide the devices that make life easier and open the doors of society towards new horizons. 

Main Image: MediaTek

Sebastian Romero Torres
Philosopher by training and inveterate geek. Lover of video games, technology, music and space.

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