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MediaTek upbeat on Q3 sales

MediaTek Inc (聯發科), the nation’s largest handset chip designer, said yesterday it expected third-quarter revenue to grow sequentially by between 15 percent and 20 percent as the industry enters its high season.

The Hsinchu-based company posted NT$9.16 billion (US$280.5 million) in second-quarter earnings, up 30.8 percent quarter-on-quarter and 79.8 percent year-on-year.

Second-quarter revenue rose 17.7 percent quarter-on-quarter and 26.1 percent year-on-year to NT$28.15 billion, the company said.

If MediaTek’s forecast holds true, sales for this quarter would be somewhere between NT$30.96 billion and NT$32.37 billion.

Gross margin was 59.1 percent in the second quarter, up 3 percentage points sequentially and 5.3 percentage points from a year ago.

“The gross margin increase was mainly attributable to an improved product mix, which led to higher average selling prices, and cost reductions,” MediaTek chief financial officer and spokesman Mingto Yu (喻銘鐸) told investors at a teleconference.

MediaTek, the nation’s top fabless chip company and design house, forecast total handset chip shipments to reach 300 million units this year.

With demand growing fast in China, the company expects to benefit from this booming market, company president Hsieh Ching-jiang (謝清江) said.

MediaTek has around a 50 percent share of China’s multimedia handset chip market.

Aside from focusing on high-margin products, Hsieh said the company would start to roll out “single chip solutions” this quarter to replace some of its current chipset solutions as well as grab market share in the ultra low cost segment.

For the first half of this year, sales grew year-on-year to NT$52.01 billion, while net income rose 77.1 percent to NT$16.16 billion, resulting in earnings per share of NT$15.15, compared with NT$8.56 in the same period last year.

The company did not provide guidance for the second half.

“It’s too early to tell for the fourth quarter. We have to wait until the end of the third quarter to make appropriate assessments,” Hsieh said.

The company’s stock traded down 5.58 percent, or NT$26.50, to close at NT$448.50 yesterday before its scheduled investor conference.
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