Fri, Feb 22, 2019 - Page 12 News List

MediaTek shifts to developing new tech

NEW REVENUE AVENUES:The firm has over the past four years invested NT$22 billion in research and development in the hope of commercializing its findings

By Lisa Wang  /  Staff reporter

Mobile phone chip supplier MediaTek Inc (聯發科) yesterday said that it has allocated 2,000 to 3,000 engineers over the past one-and-half years to focus on the development of 5G, artificial intelligence (AI) and other new technologies in pursuit of new revenue growth due to stagnating smartphone sales worldwide.

The number of affected employees constitutes about 19 percent of the chip designer’s total gobal workforce of 16,000 people.

MediaTek also earmarked a significant portion of its US$1.8 billion research and development budget last year for new technologies, it said.

Over the past four years, the firm has invested NT$22 billion (US$713.6 million) in research and development, exploring cutting-edge technologies and products, it said.

MediaTek said that it expects to commercialize those technologies and turn more of those investments into revenue next year.

Revenue from 5G, AI, application-specific ICs (ASIC) and chips for automobiles are to contribute about 10 percent of revenue next year, more than doubling from this year, MediaTek said.

“Combining 5G with AI will be an important paradigm shift. As few companies are capable of making such [5G] chips, MediaTek will certainly be among the leading group [in 5G technology],” chief executive officer Rick Tsai (蔡力行) told a media briefing.

There would be replacement demand for 5G smartphones next year, although overall mobile phone sales growth is losing steam, MediaTek said.

The Hsinchu-based company said that it expects about 50 million mobile phones to be upgraded to 5G-enabled models.

MediaTek plans to ship its first 5G modem, dubbed Helio M70, by the end of this year and roll out a cost-effective 5G system on a chip next year, it said.

MediaTek said in a separate statement that is has also made progress in its ASIC business, as it has completed the first 5G interoperability tests between its Helio M70 5G modem and Nokia Corp’s AirScale base station.

MediaTek has been working with Nokia over the past two years to accelerate the rollout of 5G networks and the first wave of 5G devices, the statement said.

MediaTek is to ship its new AI-enabled mobile phone chip, code-named Helio P90, this quarter at the earliest, allowing mobile users to take better-quality pictures, even at night or when moving, the firm said.

With strong growth momentum coming from new technologies, Tsai said that the company is expected to grow its revenue by a double-digit percentage every year in the medium to long term.

This year, the company expects revenue to be flat, or to rise slightly, due to sagging smartphone demand.

MediaTek said that it did not expect any major effects from a wafer manufacturing incident at a fab operated by its supplier, Taiwan Semiconductor Manufacturing Co (台積電).

The board of directors would discuss the feasibility of paying cash dividends on a quarterly basis, MediaTek said, adding that it would maintain its payout ratio at between 60 percent and 70 percent.

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