MediaTek Inc (聯發科技), the world's largest maker of chips for DVD players, said third-quarter profit rose 73 percent after a buildup of orders delayed by the SARS outbreak caused sales to surge.
Net income increased to NT$4.5 billion (US$133 million) in the three months ended Sept. 30, from NT$2.6 billion a year earlier, the company said in a statement. Sales rose 58 percent.
The spread of SARS earlier this year caused some customers to postpone orders to the third quarter from the second, MediaTek spokesman Mingto Yu (喻銘鐸) said. The company also benefited from rising demand for electronic gadgets such as DVD players and rewritable DVD drives used in computers.
"Market demand exceeded our expectations," Yu said at an investor conference at the Hsinchu Science Park. The company forecast sales will rise by less than 5 percent in the final three months of this year from the third quarter.
MediaTek shares fell NT$4, or 1.1 percent, to NT$363 in Taipei before the company reported earnings. The shares have surged 72 percent since Jan. 1, compared with a 37 percent gain for the TAIEX.
MediaTek increased its share of the DVD player business to 60 percent in the third quarter from 50 percent in the previous three-month period, according to Benny Lo (
SARS helped MediaTek increase its market share, analysts said earlier. The Taiwan company last year became the first to sell a chip that combines the functions of several into one. ESS Technology Inc of the US and other companies that planned to offer similar products to makers of DVD players in China were forced to cancel visits after the mid-March outbreak.
Fremont, California-based ESS Technology on Sept. 24 increased its third-quarter sales forecast to as much as US$48 million, from US$37 million to US$41 million. The US company predicted "strong demand" for digital-entertainment products for the rest of the year, expecting its new DVD chips to become the company's largest-selling product by the fourth quarter.
MediaTek is counting on new products to maintain profit growth as competition increases for DVD-player chips, which account for most of its sales. The company this year started selling chips for DVD recorders.
The Taiwan company on Oct. 8 said it will introduce its first mobile-phone chips in the current quarter to widen the company's product range and boost profit. The chips will start contributing to revenue by next year, MediaTek chairman Tsai Ming-chieh (
MediaTek's third-quarter sales, posted earlier in monthly reports, rose to NT$10.6 billion from NT$6.7 billion.
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