MediaTek unveils the Dimensity 9600 Pro, its first phone SoC on TSMC's 2nm node, and the 3nm 9600M, with boosted AI performance, as it competes with Qualcomm (Wen-Yee Lee/Reuters)

Taiwanese chipmaker MediaTek introduced a new smartphone processor called the Dimensity 9600 Pro on Tuesday, utilizing TSMC's state-of-the-art 2-nanometre manufacturing process. This cutting-edge technology marks MediaTek's first processor of this caliber and positions it to compete in the premium smartphone market, where AI features and higher-priced devices drive greater margins. Additionally, MediaTek unveiled the Dimensity 9600M, a 3-nanometre-based version aimed at a wider segment of flagship smartphones.

The inaugural smartphones utilizing these new chips will be released soon, with MediaTek already having supplied components to notable Chinese manufacturers such as Xiaomi, Oppo, and Vivo. The Dimensity 9600 Pro features a dedicated AI processor, or neural processing unit (NPU), which MediaTek claims can efficiently handle more complex generative AI applications directly on the device.

The company refrained from disclosing specific details about the NPU's performance enhancements over its predecessor, other than stating a 51% improvement in processing user prompts before AI models generate responses.

MediaTek's market value surpassed that of U.S. rival Qualcomm earlier this year, as rising prices and the growing demand for AI capabilities in smartphones create new opportunities for the company. JC Hsu, MediaTek's corporate senior vice president, emphasized the company's efforts to mitigate the impact of higher component costs on consumers amidst the AI boom, which strains supply chains.

Hsu remains optimistic about MediaTek's prospects, asserting that as the overall market gravitates towards higher prices, there is still room for the company to expand its share of the flagship segment.

The AI landscape is rapidly evolving, and MediaTek is actively diversifying its offerings beyond mobile processors. The company is venturing into data-center and custom-chip products, capitalizing on the billions of dollars that technology firms are investing in AI infrastructure. MediaTek recently raised $3.9 billion through a convertible bond sale, with Nvidia contributing $3.5 billion to the offering, alongside Alphabet, a longstanding MediaTek partner in AI infrastructure.