MediaTek Inc (聯發科), the nation’s top fabless chip company and design house, said yesterday it was optimistic about this quarter’s performance, driven by strong demand of TV integrated circuits (ICs) and handset ICs.
“Looking ahead, third-quarter revenue is expected to grow by around 8 percent to 10 percent quarter-on-quarter,” the company’s president Hsieh Ching-chiang (謝清江) told investors yesterday.
Hsieh said pricing pressure would continue in the third quarter after the average selling price (ASP) fell in the second quarter, but the drop would be within a 5 percent range.
Hsieh said the company would increase exports to emerging markets, going into global OEM/ ODM, and possibly entertaining price cuts.
In the second quarter, the Hsinchu-based company’s revenue came in at NT$22.32 billion (US$732.5 million), which reflected an increase of 15.2 percent from the previous quarter’s NT$19.38 billion and a rise of 21.2 percent from NT$18.42 billion a year earlier.
Net income was NT$5.1 billion for the second quarter based on generally accepted accounting principles, which translates into an earnings per share of NT$4.93 in the second quarter, up 26.4 percent from last quarter, the company’s latest financial data showed.
The second-quarter profit of NT$5.1 billion indicated a 26.64 percent increase from the previous quarter but a 32.98 percent decline from the same period last year, the company said.
“Despite the worldwide economic slowdown and weaker consumer sentiment, shipments of major product lines still grew from the previous quarter and the same period of last year,” MediaTek chief financial officer Mingto Yu (喻銘鐸) said.
The company’s shift towards higher margin products has paid off in a generally stable blended average selling price. In addition, its effort to cut costs on all product lines has contributed to a higher gross margin than the previous quarter.
With high margin products and cost-down efforts, Yu said the company would continue gross margin momentum this quarter, although he didn’t offer an exact gross margin forecast for the quarter.
The company’s second-quarter gross margin was 53.8 percent, up from 52.1 percent in the first quarter but lower than 55.9 percent a year earlier.
Eric Chen (陳慧明), a semiconductor analyst with BNP Paribas Securities’ Taipei branch questioned MediaTek’s company strategy since MediaTek’s handset IC market share in China is already high.
But Andrew Lu (陸行之), an analyst with Citigroup Global Markets in Taipei, believed the company’s continuous market-share gains in China’s handset IC production and in the export market would help boost the company’s long term competitiveness.
Citigroup reiterated its MediaTek rating as a top semiconductor share “buy,” Lu said in a client note yesterday.
“We believe MediaTek’s long-term competitiveness is sustainable and year-on-year sales recovery should start in September 2008,” he wrote.
Lu maintained a “buy” rating for MediaTek with a revised target price of NT$525.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to