MediaTek Inc (聯發科), which supplies handset chips to Chinese mobile phone brand Xiaomi Corp (小米), yesterday forecast a deeper-than-expected 18 percent sequential decline in revenue for this quarter due to dwindling demand for smartphone chips amid customers’ inventory adjustment.
However, the chipmaker said that this quarter would be the trough and that it expected revenue this year to grow by 10 to 20 percent from last year’s record figure of NT$213.06 billion (US$6.8 billion), driven by brisk demand — primarily from China — for its smartphone and tablet chips.
“Long-term evolution [LTE] will become the mainstream this year... We hope to double our LTE market share in China this year to 40 percent,” company president Hsieh Ching-jiang (謝清江) told investors during a quarterly teleconference.
MediaTek seized a 20 percent share of China’s LTE market last year, competing with market leader Qualcomm Inc.
China’s LTE smartphone market is expected to soar to 350 million units this year, from last year’s 130 million units, Hsieh projected.
This year, MediaTek targets shipping a total of 450 million smartphone chips, up more than 28 percent from last year’s 350 million, Hsieh said. LTE chip shipments are expected to grow to 150 million units from 30 million units last year, he added.
However, this quarter, the company “will face a brief correction in terms of revenue as the Lunar New Year holiday cuts working days and customers are reducing inventory to manage costs amid the strengthening US dollar,” Hsieh said.
Revenue is expected to fall between 10 and 18 percent in the current quarter to range from NT$45.5 billion to NT$49.9 billion, compared with NT$55.45 billion last quarter.
SMARTPHONES, TABLETS
Smartphone and tablet chips are MediaTek’s biggest revenue source, providing up to 60 percent of the company’s total revenue last quarter.
The forecast fell short of UBS analyst Eric Chen’s (陳慧明) expectation of NT$49.32 billion and Maybank Kim Eng Securities Ltd analyst Warren Lau’s (劉華仁) projection of NT$51.64 billion.
Chen and Lau gave “buy” ratings on MediaTek shares, setting target prices of NT$560 and NT$600 respectively over the next 12 months.
Gross margin would shrink to about 47 percent this quarter from last quarter’s 47.9 percent, MediaTek predicted. The chipmaker expects gross margin to stabilize in the second half after rolling out new high-end, cost-efficient chips for smartphones.
SHIPMENTS TO DROP
Smartphone chip shipments will drop to about 85 million units from 100 million units in the prior quarter, according to the company’s forecast.
“We believe [revenue] will grow quarter by quarter,” Hsieh said.
Net profit contracted 21.7 percent sequentially to NT$10.41 billion last quarter, compared with NT$13.3 billion in the third quarter last year. On an annual basis, the figure represented a 20.8 percent expansion.
LOWER THAN FORECAST
The quarterly results are lower than Chen’s estimate of NT$12.08 billion and Lau’s estimate of NT$12.25 billion.
Last year as a whole, MediaTek’s net profit surged 68.8 percent annually to an all-time high of NT$46.4 billion in net income, from NT$27.49 billion, after it acquired MStar Semiconductor Inc (晨星半導體), the world’s largest chip supplier for flat-panel TVs.
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],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
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