MediaTek Inc (聯發科技), the nation's second-largest semiconductor designer, plans to sell its first chips for mobile phones by the middle of next year as more rivals muscle in on its DVD-player chip business.
"We've been looking for our next growth momentum," said Mingto Yu (
PHOTO: AFP
"There are lots of mobile phone makers in Taiwan, China and South Korea that we can sell to."
MediaTek is turning to new products to sustain growth in profits, which quadrupled to US$94.5 million in the first quarter as sales tripled. That rate of growth may be threatened as rivals such as VIA Technologies Inc (威勝), the nation's biggest chip designer, start offering DVD-player chips, investors said.
"Ninety five percent of MediaTek's sales will still come from its current products until 2004," said Samir Mehta, who counts MediaTek shares among the US$2.2 billion that he helps manage for Lloyd George Management. "If VIA chips away at those products, MediaTek's super-normal profits will probably fall."
The shares of MediaTek, which listed on the stock market in July last year, have declined more than a third in the past month on investor concern that waning demand for electronics products may hurt the company's profit in the second quarter.
The shares closed at NT$522, down 1.3 percent, on the stock market yesterday.
A total of 1,078,000 shares changed hands, the lowest volume since Oct. 16 last year.
MediaTek will offer digital signal processors, the "brains" of a mobile phone, in rivalry with Texas Instruments Inc.
MediaTek, which has taken market share from rivals such as Sony Corp in the DVD-player business, has a low-cost advantage because it only designs semiconductors and doesn't bear the cost of owning a billion-dollar chip plant, investors said.
"It's a good strategy," said Michael Ding (
Besides mobile phone chips, MediaTek plans to boost sales by offering its first chips for DVD recorders by the end of this year, Yu said. VIA has said it will offer its first DVD chips during the second half.
The government may change accounting rules for chip- related companies, and profit margins at companies such as VIA and MediaTek may narrow if those rules are implemented, investors said. The new rules will require companies to reflect stock options given to employees as part of their costs.
"If accounting rules are changed, what would the picture look like?" asked Mehta, who has recently sold part of his stake in MediaTek. "Not very pretty."
Motorola Inc, the world's second-largest mobile phone maker, said that it expects rivals in Asia to boost their share of the market by offering products that are more affordable to consumers in the region. MediaTek expects the region's mobile phone makers to be its main customers for the new chips.
"Mobile phones are the same as the personal computer business was 20 years ago," said Yu of Asia's rise to dominance in personal computer manufacturing after the industry began in the US MediaTek's strategy may work because it will sell to some of its DVD chip customers, some investors said.
"MediaTek has been very focused on the consumer electronics business," said Mehta. "Mobile phones are also in that market."
Motorola will be one of MediaTek's main rivals. The Chicago-based company said it expects to displace Texas Instruments, the world's biggest maker of mobile phone chips, as the largest supplier next year by selling more chips to other phone makers.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group