Although it has been chatting to MediaTek about making its 2G integrated chip, Nokia is likely to award the product to Mstar, a Taiwanese analyst claims.
Nomura Securities analyst Aaron Jeng said that MStar Semiconductor, which is one of Taiwan's biggest integrated circuit makers, will supply mobile phone chips for Nokia.
Jeng said that it makes sense that MStar will get the contract because it has 1,000 people on its handset chip design team and has been known to offer customised chips for bigger outfits such as Samsung and LG.
According to Focus Taiwan the comment will be a poke in the eye with a short stick for MediaTek which has been wining and dining Nokia for years.
However MediaTek is the main chip supplier for white-box handset makers, which have been damaging Nokia's share in the business over the past few years.
Mstar has been suffering a bit of late thanks to its cunning plan of differentiation with its higher spec chips. As a result China's white-box 2G chip market has been tough because customers are only interested on cost and don't care that much about performance.
Jeng thinks that Nokia shipments of 2G phones in 2013 should be around 285 million. At the moment Mstar shipments of 2G chips for this year are likely to be only about 40 million.
He thinks that Nokia will help MStar speed up its technology upgrades and improve brand recognition and more smoothly migrate to 3G.
All however is not a bed of roses with Mstar, even if it wins the contract. Novatek Microelectronics and MediaTek, have been seen in the lastest fashionable restuarants wining and dining some of its biggest customers, including Samsung and LG.