MediaTek Inc (聯發科) plans to mass-produce its first 5G single-chip product in March next year, making the chipmaker one of the world’s leading suppliers of 5G chips.
The company’s new chip, which was unveiled at Computex Taipei late last month, would be the world’s first 5G system-on-chip (SoC) to support sub-6 gigahertz bandwidth, meaning that MediaTek would have a good chance of overtaking Qualcomm Inc, which it lagged behind during the 4G era.
“We plan to test the 5G single chip in the fourth quarter, before starting mass production in March next year,” MediaTek chief executive officer Rick Tsai (蔡力行) told an annual shareholders’ meeting in Hsinchu on Friday.
“We are confident that our 5G single chip is very competitive. We are among the leading group [of 5G technology developers],” Tsai said.
MediaTek said it plans to produce its 5G chips using Taiwan Semiconductor Manufacturing Co’s (台積電) advanced 7 nanometer technology.
The new chips would fall under a new category, independent from its 4G P and X-series branding, the company said.
Tsai also warned about hardships ahead.
“For the whole semiconductor industry, this year will be a tough year, with the memory sector suffering a deep decline,” he said.
MediaTek is maintaining its operations as normal and its second-quarter outlook has not changed, Tsai said.
“This year is a volatile period. The company will focus on improving its fundamentals,” he said.
MediaTek’s long-term technology development investments should bear fruit this year, Tsai said.
New technologies — including 5G, Wi-Fi 6, application-specific IC (ASIC) and automotive electronics — would begin contributing to revenue from this year, he said.
MediaTek expects 5G, ASIC and Artificial Intelligence of Things to contribute to more than 10 percent of the company’s total revenue this year.
MediaTek said it would allocate 24 percent of its revenue to research and development (R&D), adding that it has invested NT$220 billion (US$6.98 billion) on R&D in the past four years.
The company would continue to focus on global market deployment, enhancing its product portfolios and optimizing its profit structure, Tsai said.
Shareholders on Friday approved the company’s distribution of a cash dividend of NT$9 per share, including NT$3 from the company’s capital surplus.
MediaTek reported that net profit dropped about 14 percent annually to NT$20.78 billion last year, or earnings per share of NT$13.26. However, gross margin climbed to 38.5 percent last year from 35.6 percent in 2017.
The cash dividend represented a 2.93 percent dividend yield based on the stock’s closing price of NT$307 on Friday.
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