Thu, Apr 30, 2009 - Page 12 News List

Recovering demand boosts MediaTek’s earnings by 74%

By Lisa Wang  /  STAFF REPORTER

MediaTek Inc (聯發科), the world’s fourth-largest handset chipmaker, yesterday said first-quarter earnings increased almost 74 percent compared with the same period last year, thanks to recovering demand for chips used in mobile phones and televisions, mostly in China.

In the first quarter, earnings increased to NT$7.03 billion (US$209 million), or NT$6.57 earnings per share, compared with NT$4.03 billion, or NT$3.78 earnings per share, a year ago. On a quarterly basis, first-quarter net income represented about 143 percent growth.

“Demand for chips for digital TVs remains relatively intact, thanks to the ‘stay-at-home’ downturn in the economy. Wireless communication remains the company’s major growth driver and it showed robust expansion compared with both the previous quarter and the same period last year,” MediaTek said in a statement.

Mobile phone chips made up approximately 60 percent of the chipmaker’s total revenues of NT$23.96 billion in the first quarter, which rose 24 percent compared with the same period last year, or 15 percent quarter-on-quarter, partly helped by China’s policy of subsidizing the purchase of handsets in rural areas.

MediaTek is the biggest mobile phone chip supplier to China.

This quarter, revenues may grow between 6 percent and 15 percent, helped by growing demand for handset chips from emerging markets, largely China, MeidaTek said.

The forecast is better than the single-digit quarterly increase in revenues forecast by Credit Suisse.

The investment bank says growth momentum may pare down in the second quarter following strong growth last quarter. It gave a “neutral” rating to MediaTek shares.

MediaTek also makes chips used in DVD recorders and PC-related devices, which were weak areas as the global economic recession caused a slump in demand, the company said.

Gross margins may rise slightly this quarter from 56.1 percent last quarter as the company expects an increase in the sales of high-margin chips, the statement said.

MediaTek shares slid 1.83 percent to NT$322 yesterday.

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