Wed, Mar 18, 2009 - Page 12 News List

MediaTek sees increase in handset demand in China

By Lisa Wang  /  STAFF REPORTER

MediaTek Inc (聯發科), the world’s No. 4 handset chipmaker, yesterday said it was seeing a buildup in demand this quarter, primarily from Chinese customers, which could extend into the second quarter.

Customers became very conservative about booking orders as the global economy worsened late last year, but recently they “are recovering from the psychological shock,” MediaTek chairman Tsai Ming-kai (蔡明介) told reporters on the sidelines of a conference arranged by Merrill Lynch.

“In the first quarter, handset demand in China has not been so bad, but we do not see demand in other areas,” Tsai said.

RUSH ORDERS

Helped by rush orders from Chinese customers, MediaTek last week raised its first-quarter revenues forecast. It said revenues could grow by between 8 percent and 13 percent in the quarter ending March 31, from NT$20.65 billion (US$602 million) for the fourth quarter of last year, rather than decline between 8 percent and 16 percent as estimated early last month.

The company’s business “will be slightly better than our original conservative estimate,” Tsai said. “But, visibility for the second half is very low.”

The Chinese government’s latest economic stimulus efforts to encourage private investment and consumption may only have an indirect boost on mobile phone demand, he said.

Focusing on emerging markets, MediaTek, the biggest handset chip supplier in China, reported 47 percent growth in handset chip shipments to 2.2 million units last year, helped mainly by non-brand Chinese mobile phone makers. This year, the chip company aimed to ship more.

LOW-COST PRODUCTS

Tsai said the company’s business opportunities would still come from developing countries as ultra-low-cost products such as netbooks and China’s non-brand handsets were successful last year despite the bleak economy.

He said he had faith in China’s non-brand mobile phone makers, adding that “today, [they] are non-brand players; tomorrow [they] will be the mainstream.”

Handset shipments in the BRIC (Brazil, Russia, India and China) countries may grow at a slower rate of 0.3 percent this year from last year, which is still better than the decline of between 24.6 percent and 12.4 percent in mature regions such as Japan, the US and Europe because of the severe economic downturn, market researcher International Data Corp (IDC) said.

To invest in the growing ­segment, MediaTek planned to ramp up production of chips used in smartphones in the second half of the year. Tsai said mobile Internet devices would be key to driving semiconductor industry growth in the future.

IDC predicted that smartphone shipments could grow by 3.4 percent annually this year, bucking the trend of an 8.3 percent decline for overall mobile phones.

MediaTek shares climbed 1.64 percent to NT$310.5 yesterday, better than the broader stock market, which rose 1.41 percent.

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