As China migrates into the long-term evolution (LTE) telecom network, the intensifying competition in fourth-generation (4G) technology could create headwinds for LTE chipset laggards, especially MediaTek Inc (聯發科), Citigroup Global Markets Inc said yesterday.
Meanwhile, UBS Securities Ltd Taiwan Branch said as MediaTek’s time-division (TD) LTE chips are still not ready, it is unlikely that new smartphones running on the Taiwanese firm’s 4G chips would hit the market in the first half of this year.
The warnings by the two foreign brokerages have added more pressure on the company’s shares, which have dropped 5.64 percent since the beginning of the year. MediaTek shares dropped 3.01 percent to NT$418.50 at the end of trading yesterday.
Citigroup said the Taiwanese chip designer could face rising price competition in China, as China Mobile Ltd (中國移動) — the largest Chinese telecom by subscribers — is gearing up to gain ground in the country’s 4G mobile market.
“China Mobile’s decision to lower the LTE communication standards from five modes to three modes has opened opportunities for China’s local chipset makers. Also, its intention to promote and subsidize LTE phones at 1,000 yuan [US$165] creates greater competition for LTE chipset makers,” Citigroup analyst Roland Shu (徐振志) said in a client note.
Shu said the ramp-up production of mobile phones priced at about 1,000 yuan could cause MediaTek’s 3G octa-core chipsets to lose momentum on the lack of end-device price advantage and China Mobile’s subsidy of LTE phones.
As a result, MediaTek may need to aggressively lower the price of its new octa-core MT6592 chips or sell its existing octa-core LTE chipsets at a lower price than those of rivals Qualcomm Inc and Marvell Technology Group Ltd, he added.
Citigroup has downgraded MediaTek’s shares to “sell” from “neutral” and cut its share price target to NT$402 from NT$435.
UBS Securities also slashed its stock recommendation to “neutral” from “buy,” while retaining its price target at NT$425.
UBS equities and research head William Dong (董成康) said China Mobile’s aggressive plan to promote a TD-LTE platform has inspired more smartphone makers to prioritize LTE-phone development and has created fiercer competition for MediaTek.
In addition, the seasonal slowdown in the current quarter might also limit the upside for the stock in the near term, Dong said in a separate note.
However, Credit Suisse Securities Taipei branch yesterday maintained its “outperform” rating on MediaTek and increased its target price to NT$500 from NT$480, saying the company remains its preferred stock among Chinese smartphone supply-chain firms.
The brokerage said MediaTek would benefit from solid demand for communications devices in China this year and see its market share increase to 50 percent, from 45 percent in 2012.
The company will also gain the upper hand against its rivals because of a better product mix and higher selling prices with the help of high-end octa-core chips, Credit Suisse said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained