As the initial market response to its new 5G system-on-chip (SoC) solutions appears to be positive, 5G represents an opportunity for MediaTek Inc (聯發科) to increase the average selling prices (ASPs) of its products and boost its earnings, analysts said.
Moreover, MediaTek is likely to see its 5G SoC solutions gain better traction among Chinese smartphone original equipment manufacturers (OEMs) beginning next year, they said.
“MediaTek’s 5G SoC development is on schedule and should pave the way for its smooth transition into the 5G era in 2020 and let it capture demand tied to the coming 5G-driven handset replacement cycle,” SinoPac Securities Investment Service Corp (永豐投顧) said in a research note released on Monday.
“The de-Americanization of Chinese vendors’ supply chains would also help boost its handset SoC shipments and stabilize its market share,” SinoPac said.
MediaTek is planning to mass-produce its first 5G SOC product in March next year, making it one of the world’s leading suppliers of 5G chips.
MediaTek’s shipments of 5G chips are likely to reach 30 million units next year and grow to 75 million units in 2021, Credit Suisse Group AG said in a report on Tuesday.
China’s Oppo Mobile Telecommunications Corp (歐珀), Vivo Communication Technology Co (維沃) and Xiaomi Corp (小米) are likely to become MediaTek’s major clients for 5G chips next year, while Huawei Technologies Co (華為) and Samsung Electronics Co might increase their orders in 2021, Credit Suisse said.
While 5G opportunities look good from next year onward, aggressive 5G pricing from Qualcomm Inc or a slower 5G adoption rate in China due to trade disputes with the US might pose potential risks for MediaTek, analysts said.
The company on Wednesday reported that its revenue increased 1.95 percent month-on-month and 1.69 percent year-on-year to NT$23.49 billion (US$761.43 million) last month, the most in 13 months.
Last month’s revenue growth helped lift the company’s third-quarter revenue to NT$67.22 billion, which was in line with the revenue forecast of NT$65.3 billion to NT$70.2 billion that MediaTek made in July.
In the first three quarters of the year, total revenue reached NT$181.51 billion, an increase of 2.45 percent compared with NT$177.17 billion in the same period last year.
So far this year, MediaTek’s sales were evenly distributed amid the company’s three major business segments — mobile computing; growth solutions, including Internet of Things and power management IC; and mature solutions such as television SoC — and all three segments’ ASPs and gross margins expanded from a year earlier, SinoPac said.
SinoPac gave MediaTek a long-term “buy” rating with a target stock price of NT$490, which was set based on a price-to-earnings ratio of 25, compared with its previous target price of NT$366 based on a price-to-earnings ratio of 22.
Credit Suisse maintained its “outperform” rating on the stock, but raised its target price on MediaTek from NT$365 to NT$440, and forecast earnings per share of NT$19.71 for next year.
MediaTek shares closed at NT$372 on Wednesday in Taipei trading. The stock has risen 62.09 percent since the beginning of this year, outperforming the broader market’s 11.95 percent increase over the period.
SELF-SUFFICIENCY: Alibaba is one of a number of Chinese firms that has answered Beijing’s call to invest in the development of cutting-edge technologies Alibaba Group Holding Ltd (阿里巴巴) yesterday unveiled a new server chip that is based on advanced 5-nanometer technology, marking a milestone in China’s pursuit of semiconductor self-sufficiency. The Chinese tech giant’s newest chip is based on micro-architecture provided by the SoftBank Group Corp-owned Arm Ltd, it said. Alibaba, which is holding its annual cloud summit in Hangzhou, China, said that the chip is to be used in its own data centers in the “near future” and would not, for the time being, be sold commercially. “Customizing our own server chips is consistent with our ongoing efforts toward boosting our computing capabilities with better
Production at Taiwan Semiconductor Manufacturing Corp’s (TSMC, 台積電) fabs was not affected by a fire at a construction site for a water recycling facility in the Southern Taiwan Science Park in Tainan. The world’s biggest contract chipmaker said that the construction site is not adjacent to its fabs, which were unaffected. CTCI Corp (中鼎工程) is responsible for the construction of the facility, which it is to operate itself once it is completed, the chipmaker said. The facility caught fire at about 11am, and the blaze was brought under control about 30 minutes after the incident was reported, the Southern Taiwan Science Park Administration
AGGRESSIVE STEP: With the new processors, Apple is aiming at the high-end chips Intel has provided for the MacBook Pro and other top-end Macs for about 15 years Apple Inc on Monday took the most aggressive step yet to strip Intel Corp chips from its computers, announcing more powerful homegrown Mac processors alongside a total revamp of its MacBook Pro laptop computers. The company showcased the chips at an event called “Unleashed,” which also included its latest audio products. The new components, called the M1 Pro and M1 Max chips, are 70 percent faster than its M1 predecessors, Apple said. It also unveiled a redesigned MacBook Pro, adding larger screens, MagSafe charging and better resolution. With the new processors and devices, Apple is aiming squarely at the high-end chips that Intel has
‘NO NEGOTIATING’: Acer spokesperson Steven Chung said customers in India whose data were affected were informed, while no user data in Taiwan was compromised PC vendor Acer Inc (宏碁) yesterday confirmed that it was hacked twice in one week — once in Taiwan and once in India — but denied any damage or leak of customer data. Acer spokesperson Steven Chung (鐘興維) said that the customers in India whose data were affected were informed, while no user data in Taiwan was compromised. The hackers have tried to initiate communication, but Acer has not responded, Chung said. “We are not going to negotiate and it is not company policy to pay ransom to hackers,” he said. Upon detecting the hack, Acer initiated all security protocols and conducted