Fri, Nov 04, 2011 - Page 11 News List

MediaTek invests in firm making chips for vehicles

CONTROLLING STAKE:The company has invested NT$80 million in E-Vehicle, which was just established in May, and named a former top executive to be chairman

Staff Writer, with CNA

MediaTek Inc (聯發科), the nation’s biggest handset chip designer, yesterday said it has acquired a controlling stake in E-Vehicle Semiconductor Inc (奕微科半導體科技), which specializes in chips used in vehicle power systems.

MediaTek said it has invested NT$80 million (US$2.65 million) to take a 68.97 percent stake in E-Vehicle, which was established in May in the Hsinchu Science Park, where many high-tech Taiwanese heavyweights operate production lines.

The chip designer said it has named Hsu Ching-chuan (徐敬全), former head of MediaTek’s optical storage chip business division, as chairman of E-Vehicle after the investment goes through.

MediaTek said the investment would be used to test the waters in the vehicle power system chip business in an attempt to develop a better understanding about the business.

Currently, chips used in cellphones account for about 70 percent of MediaTek’s total sales, with China serving as its largest buyer.

UPGRADING EFFORT

Market analysts said the IC designer, which has been under great pressure from price competition in the China market, has made tremendous efforts to upgrade its technology and broaden its product mix to attract customers.

In addition to cellphone chips, MediaTek has also entered the turf of TV chip and Wi-Fi connectivity chip design.

The company has unveiled advanced cellphone chips that have been used by Chinese high-tech firm Lenovo Group Ltd (聯想), as well as Motorola, for smartphone production, while Chinese TV maker Skyworth Group (創維集團) has started using MediaTek’s 3D TV chips.

GOOD SALES REPORT

Due to the efforts in product diversification, MediaTek last week posted better-than-expected sales for the third quarter, which rose 11.4 percent from the second quarter to NT$23.38 billion.

While the company said it planned to ship more new mobile phone chips to customers in the current quarter, it expected quarterly sales would range between NT$22.9 billion and NT$24.5 billion, as the industry has entered a slow season, MediaTek said last week.

During the June-to-September quarter, MediaTek’s net profit rose 22.44 percent from the second quarter to NT$4.07 billion, the best quarterly earnings since the fourth quarter of last year, when earnings hit NT$3.83 billion.

However, the third-quarter net profit was 41.6 percent lower than the NT$6.97 billion it made a year earlier, company data showed.

MediaTek shares closed down 4.6 percent at NT$311 on the Taiwan Stock Exchange yesterday.

Additional reporting by Lisa Wang

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