MediaTek Inc (聯發科), the largest IC design house in Asia, saw its shares outperform the broader market yesterday, after raising its sales guidance for the current quarter on Monday to factor in the merger with rival MStar Semiconductor Inc (晨星), which finalized on Feb. 1.
Shares in MediaTek rose 1.05 percent to close at NT$433.5, compared with the TAIEX’s 0.43 percent increase, as investors felt positive about the firm’s new sales forecast of between NT$41.4 billion and NT$44.6 billion (US$1.36 billion and US$1.47 billion) for the January-to-March quarter, up between 4 percent and 12 percent sequentially.
On Jan. 27, the Hsinchu-based company said it would see sales shrink by between 2 percent and 10 percent to between NT$35.8 billion and NT$39 billion for this quarter, from last quarter’s NT$39.8 billion, as the industry has entered the low season this quarter.
MediaTek said in a stock exchange filing that it retained its guidance for gross margin at between 45 percent and 48 percent for this quarter, and kept its operating expense ratio unchanged at between 23 percent and 27 percent.
The Taiwanese firm provides a turnkey solution for smartphone chips, which enables handset makers in China and other emerging markets to significantly lower the production cost of low-end smartphones.
On Tuesday last week, the company surprised the market by announcing its first 4G long-term evolution octa-core system-on-chip, MT6595, amid a solid product roadmap of different classes of chips for this year.
“We project the company to have 48 percent of China’s smartphone-IC market in terms of shipments in 2014,” Daiwa Capital Market analyst Eric Chen (陳慧明) said yesterday in a note.
Daiwa adjusted upward Media-Tek’s handset IC shipment forecast to 305 million units (including both 3G feature phone ICs and smartphone ICs) this year, from the previous estimate of 300 million units, up 41 percent year-on-year.
The brokerage forecast MediaTek’s total handset IC revenue would increase by 30 percent year-on-year this year, with smartphone IC revenue expanding by 57 percent from last year, thanks to continued rises in chipset shipments and average selling prices.
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