Mediatek Inc (聯發科), the nation’s biggest handset chip designer, yesterday posted its second consecutive monthly growth in revenues, an early indicator that the chipmaker’s expectation that seasonal demand for handsets and TVs would fuel revenue growth this quarter is correct.
Last month, revenues expanded 5.93 percent to NT$7.14 billion (US$246 million) from NT$6.74 billion in June. However, that was a 13.35 percent decrease from the NT$8.24 billion it posted in the same period of last year, according to a statement posted on the Hsinchu-based chipmaker’s Web site.
Last month’s revenues were “in line [with forecasts] and they put Mediatek on track to [meet its] guidance,” Credit Suisse analyst Randy Abrams said in a report released yesterday.
This quarter, Mediatek said, it expects revenues to grow between 4.86 percent and 10.26 percent to between NT$22 billion and NT$23 billion, from NT$20.98 billion last quarter, when handset chips accounted for a share of between 65 percent and 75 percent.
Mediatek is expected to ship 15 percent more handset chips, 146 million, this quarter, compared with 127 million last quarter because of seasonal demand, while the average selling price is expected to drop 4 percent quarter-on-quarter, Abrams said.
The company supplies mobile phone chips mostly to Chinese handset makers. Its new next-generation chips supporting 3.5-generation mobile technology and its 2.75-generation technology — enhanced data rates for GSM evolution — chips have attracted interest from China’s Lenovo Group Ltd (聯想), ZTE Corp (中興) and US mobile phone maker Motorola Inc.
MediaTek shares, which plummeted 5.68 percent to NT$224 yesterday amid a global sell-off, have been under heavy pressure because of intensifying competition and a 2.5-generation handset chip price war, mainly with Chinese chipmaker Spreadtrum Communications Inc (展訊), one of Mediatek’s key sources of revenue.
As the Shanghai-based chipmaker is deferring shipments in the third quarter, Mediatek’s “loss of [market] share could be stabilizing,” Abrams said.
Abrams maintained his “underperform” rating on MediaTek because of its greater exposure to the 2.5-generation mobile phone market. He set a target price of NT$255 for the stock.