Handset chip supplier MediaTek Inc (聯發科) remains optimistic about its growth momentum in the second half of the year, helped by rising shipments of its new long-term evolution (LTE) chips and seasonal demand, chairman and chief executive Tsai Ming-kai (蔡明介) said yesterday.
With demand trending up, the company has started feeling a supply constraint from contract chipmakers, primarily Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Tsai said.
Tsai said the company would request more capacity from contract chipmakers to prevent tight supply slowing shipments next quarter.
All of the company’s smartphone chips are made on 28-nanometer technology, he said.
Tsai made the remarks at the company’s annual general meeting, where shareholders approved a proposal to distribute a cash dividend of NT$15 per share.
That represented a 3 percent dividend yield, compared with MediaTek shares’ closing price of NT$500 yesterday.
Last year, the company made NT$27.5 billion in net profit, or earnings per share of NT$20.5, up 77 percent year-on-year.
MediaTek, which counts Xiaomi Corp (小米) and CoolPad (酷派) among its clients, shipped 220 million smartphone chips and 20 million tablet chips last year.
Credit Suisse analyst Randy Abrams said MediaTek’s revenue for this quarter would be 3.6 percent higher than his previous forecast of NT$55.47 billion (US$1.85 billion).
For the full year, MediaTek may see revenue rise 55 percent to NT$210.55 billion from NT$136.1 billion last year, Abrams said.
Credit Suisse has an “outperforming” rating on MediaTek, with a target price of NT$500.
Barclays Capital analyst Andrew Lu (陸行之) yesterday raised his target price to NT$620 from NT$570, citing a bigger portion of premium chips.
Lu said higher-priced chips — octa-core chips, LTE chips and 64-bit chips — would make up 15 percent of MediaTek’s total shipments this year and 30 percent next year.
That would lead to a 2 percent sequential increase in the average selling price per quarter over the next two years, Lu said in a report. The average selling price of the premium products is US$20, higher than the blended average selling price of US$10, he said.
This quarter, MediaTek is expected to expand its revenue by between 20 percent and 25 percent from last quarter, beating the MediaTek’s forecast of between 12 percent and 20 percent growth, Lu said.
With a better product mix, the company’s gross margin would expand to as high as 49.5 percent this quarter, from 48.3 percent last quarter, Lu said, while earnings per share would rise to NT$7.98 from NT$6.82.
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