MediaTek is unlikely to roll out mobile chips built using more advanced 10nm and 7nm process technologies in 2018, as it has moved to focus on the mid-range smartphone market segment, according to industry sources.

MediaTek has shifted its R&D resources to the Helio P series mobile chips designed for mid-range devices, and put the development of its high-end Helio X series on hold, said the sources.

MediaTek's lag in the race to develop advanced-node solutions could be a warning sign that Taiwan's IC design industry growth could be constrained, the sources indicated.

MediaTek has been a leading Taiwan-based IC designer, and usually partners with Taiwan Semiconductor Manufacturing Company (TSMC) to develop advanced-node mobile chips. However, MediaTek's development of 7/10nm chips is slowing down, as the fabless chipmaker has decided to go back to basics to overcome its structural challenges, the sources noted.

MediaTek has suffered declines in smartphone chip shipments and market share since 2016. The company's gross margin for 2016 reached a record low of 35.6% despite record revenues.

MediaTek co-CEO Rick Tsai was quoted in previous reports saying the company will be striving to improve its gross margin by 1-2pp every quarter over the next 2-3 quarters, and expects its gross margin to return to the 37-39% level as early as the second half of 2018.

Tsai also noted the Helio P-series smartphone SoCs will be a major product focus of the company, and 12nm will be the main process technology MediaTek's mobile chips will be made using during the first half of 2018. Nevertheless, Tsai disclosed MediaTek will complete tape-out of 7nm products in the second half of 2018.