MediaTek Inc has unveiled an artificial-intelligence-powered chip in China, as the semiconductor maker scrambles to equip middle-range smartphones with AI functions such as face recognition.

The move is likely to put pressure on Qualcomm Inc and Huawei Technologies Co Ltd to use their AI chips in more mid-tier devices and will greatly accelerate the popularity of affordable AI-powered smartphones among consumers.

Helio P60 chip, as the new processor is called, can boost performance by up to a massive 70 percent from its predecessor, and it has new tools to support the growing market for machine learning and AI applications, the company claimed.

More importantly, MediaTek has teamed up with social networking giant Tencent Holdings Ltd as well as face-recognition startups SenseTime Co and Megvii Technology to optimize their AI applications based on the new chipset.

Wang Zibin, product director at SenseTime, said the company has optimized its algorithms based on P60's platform, which can enable users to unlock smartphones via face recognition within 100 milliseconds.

TL Lee, general manager of MediaTek's wireless communication business unit, said the company aims to expand its presence in the sector with improvements on hardware and dedication to build up an open platform.

"Smartphones that come with P60 will hit the streets in April, which will bring AI experience to a wide range of consumers," Lee said.

The move is in line with MediaTek's latest shift in focus to the mid-tier market rather than on the expensive premium end, which the company has been catering for with its Helio X series.

Xiang Ligang, a smartphone expert and CEO of industry website Cctime, said the move will exert pressure on Qualcomm and Huawei which have unveiled high-end AI chips.

"Though smartphone vendors often tout flagship handsets as their star products, it is mid-range phones that really move big sales numbers. It makes sense for MediaTek to boost its competence in the mid-tier segment," Xiang said.

"But the key is managing a balance between good user performance and price. That demands both technology and patience," Xiang said.

"It is unlikely for P60 to make budget handsets as smart as iPhone X, the premium device by Apple Inc, but small improvements will satisfy most consumers given their far lower prices," he added.

The move also came as MediaTek grapples with declining sales in China, the world's largest smartphone market. The company's sales in February went down about 25 percent year-on-year.