MediaTek Inc (聯發科) yesterday said revenue this year would dip unexpectedly for a second straight year due to steeper deceleration in the global mobile phone market.
The forecast is a downward adjustment from April, when the world’s second-biggest handset chip designer still expected annual growth in revenue and mobile chip shipments.
“At the beginning of the year, it was generally expected that global shipments of mobile phones would grow 4 to 5 percent year-on-year. Now, no growth is expected,” MediaTek chief executive officer Rick Tsai (蔡力行) told an investors’ conference.
“This will weigh on our shipment totals,” Tsai added. “As well, some customers have become conservative in their business outlook.”
MediaTek said it expects mobile chip shipments to fall slightly from last year’s numbers of 43 million to 45 million units.
The slowdown in shipments would also cause a mild decrease in revenue this year, Tsai said.
Mobile chips are a major revenue source for MediaTek, contributing as much as 42 percent of its revenue and totaling NT$60.48 billion (US$1.98 billion) last quarter.
MediaTek saw its revenue last year shrink 13.53 percent from a year earlier to NT$238.22 billion, following market share losses, primarily in China, to Qualcomm Inc.
Maybank Kim Eng Securities Ltd said it expects MediaTek to see a 2.2 percent annual decline in revenue to NT$233.1 billion this year.
However, the company is on course to improve its gross margin, Tsai said, adding that its medium-term goal is to boost its gross margin by 40 percent and operating margin by 10 percent.
“Revenue for this quarter will not show growth as significant as during the peak season,” Tsai said. “Demand for smartphones is diminishing.”
Revenue is expected to increase by 3 to 11 percent quarterly, totaling NT$62.3 billion to NT$67.1 billion this quarter, the company said, adding that shipments of mobile chips would remain at about 100 million to 110 million units this quarter, unchanged from last quarter.
Gross margin is forecast to be between 36.7 percent and 39.7 percent this quarter, compared with 38.2 percent last quarter, the company added.
MediaTek counts Chinese mobile vendors among its major clients.
Oppo Mobile Telecommunications Corp (歐珀移動) and Vivo Communication Technology Co Ltd (維沃移動通信) use MediaTek’s new Helio P60 chip in their phones, while Xiaomi Corp (小米) outfits its new entry-level Red Rice 6 with MediaTek’s first Helio A series chip.
In the second quarter, the company reported that net profit increased 2.39-fold to NT$7.5 billion from NT$2.21 billion a year earlier and 1.82-fold from NT$2.66 billion in the first quarter.
Last quarter’s figures fell short of an estimate of NT$8.6 billion made by Maybank.
Unlike some of its local peers, MediaTek said it has no plan to list its Chinese subsidiaries on Chinese stock exchanges.
Shares in MediaTek yesterday fell 2.31 percent to NT$254 in Taipei trading.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure