MediaTek Inc (聯發科), the nation’s largest handset chipmaker, yesterday posted its strongest quarterly net profit in nearly three years for the second quarter, thanks to higher-than-expected demand for chips used in smartphones and tablets in China and other emerging markets.
In the quarter ending June 30, the company’s net profit surged almost 80 percent to NT$6.72 billion (US$223 million), compared with NT$3.74 billion in the previous quarter. Last quarter’s profit was the highest since the third quarter of 2010, and represented 83 percent growth from NT$3.67 billion in the same period last year.
The firm’s growth momentum is set to extend into this quarter, supported by sales of new smartphone and tablet chips, including a quad-core tablet chip, before an expected seasonal decline next quarter, MediaTek said.
“In the third quarter [of this year], all the firm’s major products will sustain growth momentum,” company president Hsieh Ching-jiang (謝清江) told an investors’ conference.
Revenue is forecast to grow by between 5 percent and 13 percent to between NT$34.9 billion and NT$37.6 billion this quarter, compared with NT$33.28 billion last quarter, Hsieh forecast. Smartphone and tablet products accounted for about 55 percent of MediaTek’s total revenues last quarter.
The revenue growth guidance exceeds Daiwa Capital Markets analyst Eric Chen’s (陳慧明) 8 percent and Credit Suisse analyst Randy Abrams’ 8.4 percent forecasts.
“Again, MediaTek is our top pick,” Chen said in a research note yesterday. “MediaTek stands out among regional tech companies in terms of results and guidance due to strong smartphone IC shipments, upward gross margin and upward average selling prices.”
Shipments of smartphone chips are set to grow about 18 percent to as many as 65 million units this quarter from 55 million units last quarter, Hsieh said, while retaining his full-year shipment target of 200 million smartphone chips for this year.
MediaTek recently added South Korea’s LG Electronics Co to its existing 40 clients that include Chinese handset vendors Levono Group Ltd (聯想) and ZTE Corp (中興).
Following strong demand, MediaTek yesterday raised its shipment forecast for its new tablet chips to between 15 million and 20 million units this year from an original target of 10 million to 15 million units.
Gross margin is set to rise to 44.5 percent this quarter from 43.2 percent last quarter, the Hsinchu-based chipmaker projected.
Hsieh said the fourth quarter would be a slow season, despite MediaTek launching new chips such as the 4G Long-Term Evolution (LTE) modem, supporting China’s TD-LTE technology, before the launch of an integrated LTE chipset in the second half of next year.
MediaTek’s revenue has traditionally declined by between 15 percent and 20 percent sequentially in the fourth quarter over the past few years, Hsieh said.
The firm also plans to launch a new eight-core chip next quarter for high-end smartphones, which it hopes would boost the company’s overall gross margin, he said.
MediaTek’s major rival Qualcomm Inc lambasted MediaTek’s alleged overstating of the performance of the eight-core chip.
“We don’t believe the best user experience is defined by the core… I don’t believe it will be a success in the market,” Qualcomm chief marketing officer Anand Chandrasekher told a teleconference on Monday.
MediaTek shares rose 0.28 percent to NT$363 yesterday, their highest level in more than a month.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased
RSS