Sat, Oct 08, 2011 - Page 12 News List

Chinese demand helps MediaTek to exceed Q3 forecast

Staff Writer, with CNA

MediaTek Inc (聯發科), one of the nation’s leading integrated circuit (IC) designers, said yesterday that it posted better-than-expected third-quarter sales on the back of strong demand from China.

In the July-to-September period, MediaTek’s sales totaled NT$23.38 billion (US$766 million), up 11.4 percent from the second quarter.

The company said it was the second consecutive quarter that revenues grew.

Earlier this year, the IC designer estimated that revenues in the third quarter would rise between 5 percent and 10 percent from the previous quarter.

Last month alone, sales fell 4.6 percent from August to NT$7.93 billion, but it was still the second-highest monthly sales total of the year because of a consumer electronics buying spree in China ahead of the extended Oct. 1 National Day holiday.

In August, MediaTek’s revenues reached NT$8.31 billion, the highest level since September last year, when sales totaled NT$9.86 billion. The strong showing boosted accumulated sales for the third quarter.

The IC designer said sales of chips used in smartphones were stronger than expected because of the success of its campaign to recruit new clients, with its mobile phone chip customers, including China-based Lenovo Group Ltd (聯想), now numbering in the double digits.

The robust demand is expected to push shipments of smartphone chips to 10 million units this year, MediaTek said.

Mobile phone chips account for about 70 percent of MediaTek’s total revenues and China serves as the major buyer of the company’s mobile phone chips.

There had been concerns earlier in the year that MediaTek would be vulnerable to cutthroat pricing competition in its main market, but analysts have said that the company has dedicated itself to upgrading its mobile phone chips and providing a wider variety of products to woo buyers.

The company is scheduled to unveil an upgraded version of the first generation of 3.75G chips for smartphones in the first quarter of next year.

Deutsche Securities maintained its “hold” recommendation on MediaTek shares, as the brokerage expressed optimism that the chip designer’s high-end mobile phone chips had the potential to attract more customers.

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