The article states that Qualcomm and Spreadtrum will see the biggest declines, with Spreadtrum shipments declining almost 20% because of a lack of LTE solutions and weakness in emerging market demand.
Qualcomm sees declining shipments, but comes off a strong base
The article mentions that Qualcomm's Snapdragon 400 and Snapdragon 600 series are facing a strong challenge from comparable parts from MediaTek, with the cost structure of presumably Snapdragon 615 being less competitive than that of (presumably) MediaTek's MT6752. In earlier posts, I already compared these SoCs in some detail, and there are reasons to expect that such a cost-structure advantage for MediaTek does exist.
However, any decline for Qualcomm will come off a strong base in Q4 2014, which saw its dominance of the integrated LTE SoC market translate into market share gains (mainly at the expense of MediaTek), also in China. For the cost-sensitive part of the LTE market (covered, for example, by Snapdragon 410 and the upcoming Snapdragon 210), it does not yet face a challenge.
MediaTek struggling to reverse trend of market share decline, but product mix improves
MediaTek's market share has been negatively affected in the last part of 2014 because it was relatively late with its integrated LTE solutions, especially for the cost-sensitive part of the market (indeed, the MT6735, intended to cover the cost-sensitive segment, will only ship in Q2 2015). The article says MediaTek's shipments will decline about 15%, which suggests further market share loss in China for MediaTek after what looks like a weak Q4 2014. However, MediaTek's product mix is changing dramatically as a strong ramp of higher-end LTE SoCs such as MT6752 is offsetting declining shipments of MediaTek's existing 3G solutions which have dominated the Chinese smartphone processor market for some time.
The competitiveness of MediaTek's LTE solutions such as MT6752 gives some reason for optimism for its prospects for the rest of 2015 as these new chips ramp. However, another key product, the high-end MT6795, has been reported to have had production issues that seem to have delayed its introduction. Contrary to my original expectations, reports based on a leaked MediaTek roadmap suggest the MT6795 contains Cortex-A57 and Cortex-A53 cores in a big.LITTLE configuration, rather than a high-clocked octa-core Cortex-A53 CPU configuration, putting it squarely in the high-end segment and reducing the potential for MediaTek's chip to be significantly more cost-competitive than competitor's high-end solutions. However, no official information about the exact CPU configuration of MT6795 as well as up-to-date information about its production schedule has yet been given by MediaTek.
MediaTek's revenues for January 2015 came in at NT$17.5 billion, a level similar to the previous month. Although a year-over-year increase of 36% is apparent, the January 2014 revenue figure does not include MStar revenues. MediaTek has merged with MStar and started recognizing revenues from it in February 2014, so the year over year comparison is not very meaningful. According to DigiTimes, market watchers expected MediaTek's Q1 2015 revenues to decline no more than 10% over Q4 2014 with a strong ramp of new 4G smartphone SoCs. However, this turned out to be too optimistic.
HiSilicon gains as Huawei increasingly adopts in-house chips
Given the mentioned declines in shipments, there must be gainers to make up the balance. The article mentions strong shipments by Huawei's HiSilicon division for Huawei smartphone models. This probably reflects a trend more utilization of its own (HiSilicon) SoCs, also for more cost-senstive segments (for example, the recently announced Kirin 620 is likely to come into play).
Sources: DigiTimes Research (China smartphone AP shipment forecast for Q1 2015), DigiTimes Research (article on delay of Snapdragon 810 and MT6795)
Updated February 17, 2015.