MediaTek, a key player in Taiwan’s mobile chip industry, has strategically launched its new Dimensity 9500 mobile processor, intensifying its competition with Qualcomm (NASDAQ:QCOM) in the race to power on-device agentic artificial intelligence.

This advanced chip, built on Taiwan Semiconductor Manufacturing Co.’s (NYSE:TSM) 3-nanometer process, is engineered to deliver significant improvements, including sharper 4K photos, enhanced AI model performance, and smarter summaries of calls and meetings.

Smartphones equipped with the Dimensity 9500 are expected to reach the market in the fourth quarter, Bloomberg reported on Monday.

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The launch comes as Xiaomi (OTC:XIACY) prepares to unveil its latest Qualcomm Snapdragon-powered lineup this week, aiming to challenge Apple’s (NASDAQ:AAPL) iPhone 17.

MediaTek, by contrast, is positioning its new processor to support Chinese brands such as Vivo in competing more effectively in the premium smartphone segment.

Despite the rollout, company executives remain cautious about broader market conditions. MediaTek projects that global smartphone shipments may expand only 1%–2% in 2025, with subsidies that briefly lifted demand in China unlikely to offset overall sluggish growth.

To mitigate security concerns among its U.S. customers, MediaTek also intends to shift a portion of its chip production for automotive and other sensitive applications to Taiwan Semiconductor’s Arizona facility.

The company is currently in negotiations with Taiwan Semiconductor to formalize this move, which would align with the Taiwanese contract chipmaker’s expanding U.S. operations.

The Arizona plant recently reported its first profit four years after its inception and already serves key clients including Apple, Nvidia (NASDAQ:NVDA), and Advanced Micro Devices (NASDAQ:AMD).

The facility commenced 4-nanometer mass production in late 2023 and is preparing a second fab for 3-nanometer output.

Further cementing their long-standing partnership, MediaTek has received approval from Taiwan Semiconductor to utilize its next-generation 2-nanometer process for a new flagship System-on-a-Chip (SoC), expected to be branded the Dimensity 9600.

Mass production for this advanced chip is targeted for late 2025, with a market release anticipated in 2026.

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