Mon, Jan 08, 2018 - Page 15 News List

MediaTek drops to No. 4 IC designer on sales dip

SPECIFICATION FAILURES:The decline was due mainly to a drop in profits from the Chinese market, analysts said, although the company caught up in the fourth quarter

Staff writer, with CNA

MediaTek Inc (聯發科) last year dropped from being the world’s No. 3 integrated circuit (IC) designer to No. 4 after posting annual sales totaling US$7.88 billion, down 11 percent from 2016, market information advisory firm IC Insights said on Friday.

The decline in MediaTek’s sales largely reflected a drop in revenue from the Chinese market, where the company for much of the year failed to meet specification requirements for smartphone chips, analysts said.

However, MediaTek caught up in the fourth quarter and is not expected to face the same disadvantage this year, analysts said.

Smartphone chips are the largest source of sales for the company, accounting for about 60 percent of total sales.

US-based designer Qualcomm Inc retained its title as the world’s largest IC designer, with US$17.08 billion in sales, up 11 percent from a year earlier, IC Insights said.

Singapore-headquartered Broadcom Ltd came in second, generating US$16.07 billion in sales, up 16 percent from 2016, ahead of US-based Nvidia Corp, whose sales hit US$9.23 billion, up 44 percent year-on-year, IC Insights said.

Apple came in fifth place behind MediaTek, with US$6.66 billion in sales, up 3 percent from a year earlier, followed by US-based Advanced Micro Devices Inc (US$5.25 billion), China’s HiSilicon Technologies Co (海思, US$4.72 billion), US-based Xilinx Inc (US$2.48 billion), US-based Marvell Technology Group Ltd (US$2.39 billion) and China’s Tsinghua Unigroup Ltd (清華紫光, US$2.05 billion).

IC Insights said the global IC design industry had total sales of US$100.61 billion last year, up 11 percent from a year earlier on strong demand for memory chips.

The combined revenue posted by the top 10 designers rose 12 percent from a year earlier to US$73.79 billion, accounting for more than 70 percent of the global total, it said.

Separately, Taiwan-based Digitimes Research said it expects MediaTek to become the second-largest supplier of application processors (APs) used in smartphones, with an annual increase in shipments of 3.6 percent buoyed by its competitive products.

However, the company might not achieve its annual target of 400 million smartphone APs in light of decelerating smartphone growth worldwide, Digitimes said in a press release on Dec. 29.

Qualcomm is expected to maintain its dominance in the market, although the company’s shipments could decline 1.2 percent year-on-year due to rising competition from rivals, as some major smartphone vendors, such as Apple Inc, Samsung Electronics Co and Huawei Technologies Co (華為), are investing in the development and production of their own APs for their flagship handsets, the researcher said.

Global shipments of smartphone APs are forecast to increase 5.1 percent to 1.455 billion units this year, following an estimated 6.4 percent growth last year, it said.

Additional reporting by Lisa Wang

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