DigiTimes heard rumors that MediaTek recently suspended shipments of its SoCs to Xiaomi. After an astronomic growth in recent years, Xiaomi is now world's third largest smartphone maker.
An exact reason for why MediaTek is no longer supplying Xiaomi with chips isn't known and MediaTek's only response is that it does not comment on specific customers. Rumor is going around that MediaTek ended its partnership with Xiaomi after the latter one invested in SoC supplier Leadcore Technology to get access to the chip designer's technology patents, but other sources claim MediaTek is disgruntled because Xiaomi's pricing strategy is disrupting MediaTek's plan to expand its presence in the mid-range and high-end smartphone segments.
Nevertheless, unspecified industry sources in China pointed out a different reason behind MediaTek's departure from Xiaomi's suppliers list. MediaTek has been trying to expand its presence in the mid-range and high-end market segments, but finds Xiaomi's pricing strategy is disrupting its plans.
For example, MediaTek's MT6589T, a quad-core 1.5GHz chip, was originally designed to target mid-range and high-end mobile devices. The solution was introduced in Xiaomi's Redmi smartphone in August 2013. However, prices for the Redmi series have been cut to as low as CNY699 (US$114).