The major action by Qualcomm to enter the AI ASIC customized chip market has sparked concerns in the market about the potential erosion of future AI opportunities for MediaTek, the leading IC design company in Taiwan. This led to a significant drop in MediaTek's stock price on the 26th, plummeting by 430 TWD to the limit-down price of 3,880 TWD per share.

According to the cooperation agreement, Qualcomm will officially become the supplier of CPUs for Meta's data centers. The CPU designed specifically for data centers, "Qualcomm Dragonfly C1000," will provide powerful computing capabilities for Meta's next-generation server clusters, with mass production expected to begin in the second half of 2028.

Qualcomm's President and CEO Cristiano Amon emphasized that this chip has made significant breakthroughs in single-core performance and power efficiency. This collaboration also signifies that Qualcomm's partnership with Meta has expanded from end devices to the data center field. Additionally, it is rumored that Qualcomm is negotiating to acquire the AI chip startup Modular Inc. at an estimated valuation of about 4 billion USD, which will pose strong competition to existing market leaders like NVIDIA through continuous expansion of its AI product line and alliances.

In contrast, Taiwan's chip giant MediaTek is currently facing a mixed bag of bullish and bearish signals. On the positive side, MediaTek recently succeeded in securing orders for Google's next-generation TPU chips, surpassing its competitor Broadcom, and is set to launch its latest flagship mobile chip with a 2nm process in the third quarter of 2026, which has attracted significant interest from foreign investors. Foreign investors are optimistic that MediaTek's AI ASIC sector will enter a growth phase in 2027, with some European investors raising MediaTek's target price significantly to 6,500 TWD. However, the negative news of Qualcomm's strong entry into the ASIC market has shaken investor confidence, leading to significant stock price volatility.

Regarding the future market outlook, MediaTek's Vice Chairman and CEO Cai Lihang remains very optimistic about the strong momentum of the AI ASIC business. In a previous earnings call, Cai Lihang projected that by 2027, the overall potential market size for AI ASIC could reach 70 to 80 billion USD, with MediaTek aiming to capture 10% to 15% of the market share. However, as Qualcomm continues to advance, the competition between the two major chip manufacturers in the AI chip and data center market is expected to intensify.

(Source of the first image: Technology News)