Fri, Jan 27, 2017 - Page 12 News List

MediaTek issues cautious quarterly outlook

By Ted Chen  /  Staff reporter

MediaTek Inc (聯發科), the nation’s biggest handset chip designer, yesterday provided a reserved outlook for this quarter in light of cyclical factors and pressures from a strong US dollar.

Sales this quarter are expected to decline quarter-on-quarter by between 14 percent and 22 percent to between NT$53.6 billion and NT$59.1 billion (US$1.71 billion and US$1.88 billion), MediaTek vice chairman Hsieh Ching-jiang (謝清江) said in a teleconference.

Gross margin would continue to be strained and reach between 32.5 percent and 35.5 percent, while shipments of smartphone chips and tablet chips are also expected to dip from between 135 million and 145 million units to between 105 million and 115 million, he said.

HIGH-END CHIPS

Overall, global smartphone shipments are expected to total between 1.6 billion and 1.7 billion units this year, an increase of between 4 percent and 6 percent from last year, Hsieh said, adding that growth will mainly depend on emerging markets, as demand from China is expected to remain flat from last year.

The conservative outlook reflects a challenging year ahead for the company, which analysts have said is facing rising competition in the global market, especially in China and India, and margin pressure after tapping into the high-end market with its Helio-series chips.

The Helio chip family accounted for about 10 percent of the firm’s overall sales last year, Hsieh said, adding that the Helio X20 processor last year met sales expectations, while the higher-end Helio X30 fell short.

The company does not have immediate updates to the Helio series planned, he said, adding that the next iteration would not arrive until late this year or early next year.

“As high-end chips are costly to develop, we will continue to strengthen our hold on the ‘super mid-market,’” Hsieh said, referring to the market segment of performance devices priced considerably lower than flagship models.

MediaTek’s sales last quarter dropped 12.4 percent quarter-on-quarter to NT$68.68 billion, due to slow-season effects, while gross margin fell 0.7 percentage points from the previous quarter to 34.5 percent, company data showed.

For the whole of last year, MediaTek sales rose 29.2 percent annually to a record NT$275.51 billion, but gross margin fell to a record low of 35.6 percent, the data showed.

Net profit last year fell 6.7 percent annually to NT$24.03 billion, the lowest level in four years, with earnings per share of NT$15.16, the data showed.

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