MediaTek Inc (聯發科), the world’s No. 2 handset chip designer, yesterday posted a 59 percent annual growth in operating income for last quarter as customers’ growing adoption of new smartphone chips drove its gross margin to a three-year high.
Operating income surged to NT$1.93 billion (US$65.12 million) during the quarter ending on March 31, compared with NT$1.21 billion during the same period last year, MediaTek’s financial statement showed.
That represents quarterly growth of 49.5 percent from NT$1.29 billion.
Gross margin climbed to 38.4 percent, from 37.4 percent the previous quarter and 33.5 percent a year earlier.
“Launches of new products, including the Helio chip series for smartphones, and cost-effective modems have greatly contributed to the improvement of gross margin,” MediaTek chief executive officer Rick Tsai (蔡力行) told a teleconference.
However, smartphone chips still delivered a lower-than-average gross margin, MediaTek said.
MediaTek undercut Qualcomm Inc’s Snapdragon 700 processors and is supplying its new Helio P60 chips to Chinese vendor Oppo Mobile Telecommunications Corp (歐珀移動) for its R15 smartphone.
MediaTek expects gross margin to be between 36.5 and 39.5 percent this quarter.
As demand picks up, revenue this quarter is to expand by between 12 and 21 percent to between NT$55.6 billion and NT$59.6 billion, compared with NT$49.65 billion last quarter, Tsai said.
“Our major clients have smoothly digested excess inventories over the past few months. The company is also ramping up production of new products,” Tsai said.
The company expects to ship between 90 million and 100 million processors for smartphones and tablets this quarter, up from between 75 million and 85 million during the first quarter.
Processors for smartphones and tablets are to contribute a bigger slice of the company’s revenue this quarter, compared with last quarter’s between 30 and 35 percent, Tsai said.
MediaTek’s net profit plummeted 73.8 percent sequentially to NT$2.66 billion last quarter, as the company booked share disposal gains in the previous quarter.
Compared with last year, net profit shrank about 60 percent from NT$6.64 billion.
“Smartphone sales growth decelerated in China during the fourth quarter of 2017. The market was still very tough in the first quarter of this year,” Tsai said.
This year, Chinese handset vendors should regain some market shares from global rivals in China, Tsai said.
Overall, worldwide smartphone sales are forecast to grow less than 5 percent this year, but the Chinese market should grow at a faster pace, he said.
The company’s board of directors yesterday approved the distribution of a cash dividend of NT$10 per common share, representing a payout ratio of about 64 percent, as the company earned NT$15.59 per share last year.
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