MediaTek Inc (聯發科), which designs smartphone chips for China’s Xiaomi Corp (小米), yesterday said it plans to produce its first processors for autonomous cars next quarter as the growth of worldwide mobile phone sales decelerates.
The company’s announcement also came about one month after bigger rival Qualcomm Inc unveiled a US$47 billion acquisition of the world’s biggest automotive chip supplier, NXP Semiconductors NV, to expand its businesses beyond mobile phones.
“Automotive is a segment that is forecast to have a higher growth rate than other applications for the semiconductor industry. That is why most semiconductor companies have actively tapped into the automotive segment in recent years,” MediaTek New Business Department general manager J.C. Hsu (徐敬全) told a news conference.
The composite annual growth rate of the automotive semiconductor sector is forecast to grow by as much as 7 percent from this year to 2020, surpassing the worldwide vehicle growth rate of 3 percent, Hsu said, citing an unspecified market researcher’s projection.
That also indicates higher semiconductor content per car, which is to increase to US$610 per vehicle next year, compared with US$568 per vehicle this year, he said.
The Hsinchu-based chipmaker is going to focus on core areas of in-vehicle infotainment, telematics and advanced driver-assistance systems to further the evolution toward autonomous driving, Hsu said.
“The demands of connected and autonomous vehicles require a unique portfolio of technologies. MediaTek’s core competencies create a natural progression for us to design for the future of driving,” Hsu said.
MediaTek is vying for a 20 to 30 percent share of the world’s automotive semiconductor market in the 2020 to 2025 period, the firm said, adding that by 2020, the automotive business will begin contributing meaningful revenue.
To reach that goal, the firm plans to expand its automotive team to several hundred engineers and to seek merger-and-acquisition deals to expedite its expansion into the automotive segment, it said.
It plans to send its first automotive processors to customers in the first quarter of next year for qualification, which could take as long as one-and-a-half years.
Vice chairman Hsieh Ching-jiang (謝清江) said he expects to see an improvement in the gross margin in the second half of next year, benefiting from new advanced and more cost-efficient mobile phone chips.
MediaTek reported a gross margin of 35.2 percent for last quarter, ending 10 straight quarters of contraction.
It said it expects global smartphone shipments to grow about 5 percent annually next year, and it hopes to outperform the industry in terms of chip shipments on market share gains.
MediaTek expects to ship more than 525 million chips used in smartphones and tablets this year, which would be an all-time high.
MediaTek shares yesterday dropped 0.89 percent to close at NT$221.5 in Taipei trading, underperforming the TAIEX, which lost 0.32 percent.
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