Chipmaker MediaTek Inc (聯發科), which supplies handset chips mainly to Chinese firms such as ZTE Corp (中興), yesterday said it expects to post at least 25 percent in sequential revenue growth this quarter, given the strong demand resulting from the Workers’ Day holiday.
The company made the forecast at an investors’ conference, predicting that its growth momentum would pick up firmly from a seasonally slack first quarter.
In the first quarter, MediaTek saw its net income shrink 16.6 percent to NT$3.74 billion (US$125.86 million), from NT$4.48 billion in the final quarter of last year. On an annual basis, the figure increased 51 percent from NT$2.48 billion.
This quarter, revenue will expand to between NT$30 billion and NT$31.6 billion, which would be a 25 percent to 32 percent increase from last quarter’s NT$23.97 billion, MediaTek president Hsieh Ching-jiang (謝清江) said.
“Because of the Workers’ Day holiday in China and demand from some customers for early inventory buildup for next quarter, we are seeing significant growth for all products in the second quarter. Demand for smartphone [chips] is particularly strong,” Hsieh said.
Smartphone chip shipments are expected to soar by as much as 43 percent this quarter to 50 million units from 35 million units last quarter, with the contribution from new advanced quad-core chips, dubbed MT6589 chips, set to increase to 20 percent from 10 percent, Hsieh said.
Smartphone chips are MediaTek’s biggest source of revenue, accounting for about 45 percent of earnings last quarter, the company said.
Rising demand for advanced smartphone chips and a slow price reduction pace of about 5 percent may help boost the company’s gross margin to its highest level in five quarters at 43.5 percent this quarter, from 42.1 percent last quarter, the chipmaker said.
MediaTek maintained its smartphone chip shipments target at 200 million units for the year, but raised its shipments target for tablet chips to 15 million units from the 10 million units it had estimated previously.
Separately, the chipmaker said its board had approved a plan to distribute NT$9 in cash dividends per share to its shareholders, based on last year’s net income of NT$15.69 billion, or NT$12.9 per share. The distribution represented a cash dividend yield of 2.42 percent.
Daiwa Capital Markets analyst Eric Chen (陳慧明) yesterday said the company’s “revenue guidance is surprisingly good and what is more important is that its gross margin is going up.”
Chen, who forecast MediaTek’s revenue would grow 17 percent this year, retained his “buy” rating and target price at NT$415 on MediaTek shares, implying a rise of about 11 percent in the next six months based on the stock’s closing price of NT$372.5 yesterday.