Thu, Mar 23, 2017 - Page 12 News List

MediaTek hires ex-TSMC CEO Rick Tsai

STRATEGIST:Rick Tsai, 66, stepped down as Chunghwa Telecom Co chairman in December last year. Before that, he was TSMC chief executive officer until June 2009

By Lisa Wang  /  Staff reporter

MediaTek Inc (聯發科) yesterday said it has tapped former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) executive Rick Tsai (蔡力行) to formulate a strategy blueprint for the handset chip designer’s medium to long-term development.

Tsai was parachuted into the job as MediaTek is struggling to stop gross margin from contracting amid intensifying price competition from Qualcomm Inc and Spreadtrum Communications Co (展訊通信).

The company’s gross margin dropped to an all-time low of 34.5 percent in the final quarter of last year.

“Tsai will be working on the mid to long-term strategic blueprint for future breakthroughs and growth for MediaTek, and to continuously elevate the firm’s global management capabilities so it becomes a world-class company,” MediaTek chairman and chief executive Tsai Ming-kai (蔡明介) said in a statement.

MediaTek did not provide details about Rick Tsai’s new position at the company.

Rick Tsai, 66, stepped down as Chunghwa Telecom Co (中華電信) chairman in December last year. Before that, he was TSMC chief executive officer until June 2009.

MediaTek yesterday also named Rick Tsai as a director and as vice chairman of MediaTek Group (聯發科集團) to enhance the integration between MediaTek and its subsidiaries.

The chip designer plans to set up a MediaTek Group Office.

MediaTek president Hsieh Ching-jiang (謝清江) is to be in charge of the office, the statement said.

The company owns numerous subsidiaries, including newly acquired fabless IC company Airoha Technology Corp (絡達科技), smart TV chip designer MStar Semiconductor Inc (晨星半導體) and power management chipmaker Richtek Technology Corp (立錡科技).

The personnel adjustments are subject to the approval of shareholders at the annual shareholders’ meeting on June 15.

MediaTek yesterday also trimmed its operating income forecast due to an increase in operating expenses.

It forecast that operating income would more than halve to between NT$1.01 billion and NT$1.24 billion (US$33.1 million to US$40.6 million) in the first quarter, compared with its previous estimate of NT$2.28 billion to NT$2.79 billion.

Operating expenses would likely account for about 32 percent of the company’s overall earnings this quarter, up from the 29 percent it forecast earlier this year, according to a company filing with the Taiwan Stock Exchange.

Operating expenses are to rise to between NT$16.89 billion and NT$19.15 billion, from NT$15.39 billion and NT$17.74 billion, the filing showed.

Net income this quarter would swell to between NT$6.27 billion and NT$7.66 billion, compared with the NT$2.67 billion to NT$3.26 billion range estimated in January, due to to asset gains from the purchase of Airoha Technology and selling the investment in AutoChips Inc (傑發), the company said.

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