Integrated circuit designer MStar Semiconductor Inc (晨星半導體) said yesterday that sales for the second quarter of this year, in US dollar terms, met the company’s expectations on higher shipments of chips used in TV and mobile phones.
During the second quarter, MStar posted US$289 million (NT$8.35 billion) in revenue, up 3.2 percent from the first quarter, and a 20.1 percent increase from a year earlier.
Second-quarter sales were within the range of US$280 million to US$297 million that the company had -previously estimated.
However, in a sign of a possible slowdown ahead, MStar’s sales last month fell 6.4 percent from May to US$93 million, a 20.8 percent increase from a year earlier.
The month-on-month decline in last month’s sales reflected fierce competition in the global TV chip market, analysts said.
MStar is currently the largest TV chip supplier in the world with a 45 percent share of the global market, according to Grand Cathay Securities Corp (大華證券).
The integrated circuit designer forecasts that its share of the market will exceed 50 percent by the end of this year.
However, analysts said that the company faces rising competition from other integrated circuit designers, in particular MediaTek Inc (聯發科), which is diversifying its product portfolio by branching into the TV chip sector from mobile phone chips.
Analysts said that although MStar has vowed to extend its production line into mobile phone chips, it remains to be seen how soon the new products will boost the company’s bottom line.
Analysts fear MStar’s mobile phone chips will not be as competitive as those of other companies because its products are largely low-end in quality.
Currently, TV chips account for more than 70 percent of MStar’s total revenue, with mobile phone chips making up less than 10 percent.
However, MStar chairman Wayne Liang (梁公偉) said the company was upbeat about its mobile phone chip business.
MStar expects the mobile phone chip portion of total sales to be more than 10 percent by the end of this year, Liang said.
The MStar chairman added that he also expects the company to fare better in the second half on rising global demand as the integrated circuit sector enters its peak season.
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