Sat, Oct 06, 2012 - Page 13 News List

MediaTek posts strong revenues

POPULAR IN CHINA:MediaTek’s president has told investors that revenue was likely to continue to grow due to demand for its new smartphone chips

By Lisa Wang  /  Staff reporter

MediaTek Inc (聯發科), the nation’s top handset chip supplier, yesterday posted the strongest monthly revenue in about two-and-a-half years for last month on vigorous demand for its smartphone chips from China, causing last quarter’s total revenue to beat its forecast.

Revenue jumped 19.43 percent to NT$11.01 billion (US$374.9 million), compared with August’s NT$9.22 billion, according to the company’s statement. That represented a 39 percent expansion from NT$7.93 billion a year ago.

SEASONAL HIGH DEMAND

Last quarter, MediaTek accumulated NT$29.48 billion in revenue, exceeding the company’s expectation that revenue would increase to between NT$26.5 billion and NT$27.7 billion last quarter because of seasonal high demand. That was an expansion of 25.77 percent from NT$23.44 billion in the second quarter.

Shares of MediaTek rallied 2.04 percent to NT$325 after reporting the better-than-expected sales results.

Credit Suisse analyst Randy Abrams said the third-quarter revenue was slightly above the brokerage’s forecast. He forecast revenue to grow at a 24 percent quarterly pace to NT$29.06 billion last quarter.

“Smartphone [chips] look to be quarter-on-quarter ... on the ramp of dual core into branded Chinese original electronics maker,” Abrams said in a note yesterday.

He forecast MediaTek would ship 38.5 million dual-core smartphone chips last quarter and 42 million for the whole of this year, helping push up its overall smartphone chip shipments to 110 million units, surpassing MediaTek’s expectation of 95 million units.

MediaTek president Hsieh Ching-jiang (謝清江) told investors in July that the company’s revenue would continue to grow, thanks to robust demand for its new smartphone chips, bucking the downward trend of the worldwide semiconductor industry.

However, chip supply from its contract chip partners could cap its shipments, he said.

Smartphone chips were expected to reach a bigger revenue share, about 30 percent of the company’s overall revenue last quarter, from 25 percent in the second quarter, Hsieh said in July.

Abrams expected MediaTek to make NT$5.83 billion in net profit, or NT$4.77 per share, last quarter, up 74 percent from NT$3.36 billion, or NT$2.95 a share, in the second quarter.

Gross margin is expected to rise to 42.1 percent from 40.8 percent a quarter ago, matching MediaTek’s forecast range from 41 percent to 43 percent.

Next quarter, Abrams expected MediaTek’s revenue to slide 6 percent sequentially to NT$27.57 billion, which would be better than seasonal pattern.

POTENTIAL RISK

However, a potential risk to this forecast would be China’s Golden Week sell-through.

Over the past five years, inventory excess has caused MediaTek’s revenue to fall 18 percent quarterly on average, according to Credit Suisse.

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