Chip designer MediaTek Inc (聯發科) expects quarterly revenue to grow up to 6 percent on stabilizing demand and contributions from a newly acquired power management chip supplier.
The company, which supplies handset chips to Xiaomi Corp (小米) and Huawei Technology Co (華為), expects sales to reach between NT$57 billion and NT$60.4 billion (US$1.74 billion and US$1.84 billion) this quarter, compared with last quarter’s NT$56.96 billion.
“We are seeing overall demand become relatively stable in the fourth quarter compared with the third quarter,” MediaTek vice chairman and president Hsieh Ching-jiang (謝清江) told an investors’ teleconference yesterday.
Richtek Technology Corp (立錡), 50 percent owned by MediaTek, is to help boost the firm’s revenue by 3 percent to 5 percent this quarter, Hsieh said.
The revenue forecast beat expectations of quarterly declines of 3 percent by HSBC Securities Corp and 7.8 percent by Yuanta Securities Co (元大證券).
However, gross margin is to continue to fall to about 40 percent this quarter from 42.7 percent last quarter, due to intensifying price competition for 3G and 4G mobile phone chips.
Average selling prices of the company’s products are also expected to rebound about 5 percent from last quarter, as the company expects to ship more advanced chips supporting long-term evolution (LTE) technology.
Shipments of smartphone chips are to drop about 12.5 percent from last quarter to 105 million units, with the eight-core chips accounting for 25 percent of total shipments this quarter, Hsieh said.
The company retained its full-year shipment target of 400 million chips.
As the Chinese smartphone market’s growth is slowing down, MediaTek is now targeting emerging markets, such as India, for new momentum, Hsieh said.
“We are seeing nascent demand for LTE smartphones in India as retail prices of those phones have fallen to a sweet spot,” Hsieh said.
Emerging markets are expected to grow by between 10 percent and 15 percent annually over the next few years.
China and developed countries are expected to grow 5 percent annually, or even remain flat, he said.
As for chips for tablet devices, MediaTek said shipments might drop from last quarter’s 20 million units to 15 million units this quarter.
It said its full-year shipment target would remain at 50 million chips.
Tablet and mobile phone chips are MediaTek’s biggest source of revenue, contributing as much as 65 percent.
The company made the forecasts after reporting a 25 percent sequential increase in net profit to NT$7.96 billion for last quarter, ending three straight quarters of decline.
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