MediaTek posts robust revenues

PROMISING::While the chip designer’s May sales fell sequentially, they were up from last year, propelled by strong handset demand in China and its expansion into tablets

By Kevin Chen  /  Staff reporter

Sat, Jun 08, 2013 - Page 14

MediaTek Inc (聯發科), the nation’s biggest handset chip designer, yesterday said its consolidated revenue reached NT$10.93 billion (US$365.9 million) last month, down 13.05 percent from April, when it reported its highest monthly sales since February 2010.

However, last month’s number was up 42.84 percent from a year earlier, MediaTek said in a statement, reflecting the impact from stronger handset market growth in China and the company’s efforts to expand into the tablet market.

Analysts said the company’s revenue fall last month, following very strong sales of NT$12.57 billion in April, was in line with the seasonal pattern, with vendors building inventories ahead of the May Labor Day holiday in China.

Last month’s figure was also higher than the forecast of Kim Eng Securities Ltd analyst Warren Lau (劉華仁), who expected MediaTek’s sales to drop by 20 to 25 percent from April and increase by 15 to 20 percent on an annual basis.

“Conservatively, assuming June sales are similar to sales in May, MediaTek would still be able to reach the upper end of its second-quarter guidance,” the Hong Kong-based analyst said in a note.

On May 6, MediaTek president Hsieh Ching-jiang (謝清江) told investors that revenue this quarter would range between NT$30 billion and NT$31.6 billion, representing an increase of between 25 percent and 32 percent from last quarter’s NT$23.97 billion.

The company’s combined revenue for April and last month reached NT$23.5 billion, which means MediaTek would have to make NT$6.5 billion to NT$8.1 billion in sales this month to reach its second-quarter revenue guidance.

Accumulated revenue from January to last month totaled NT$47.48 billion, up 34.84 percent year-on-year, as the company is riding the wave of a strong demand for lower-priced smartphones from China and emerging markets.

“MediaTek is no doubt the major beneficiary of the robust low-cost smartphone production in China,” Deutsche Bank analyst Jessica Chang (張幸宜) said in a recent note.

“This market has been growing strongly on the back of increasing China 3G adoption and also warming demand for smartphones from emerging countries,” Chang said.

Tablet demand and 4G technology migration present another two new mid-term opportunities for MediaTek, she added.

At the Computex fair in Taipei this week, MediaTek exhibited its quad-core chips in Acer Inc’s (宏碁) Liquid S1 “phablet” (a smartphone-tablet hybrid) and Liquid E2 smartphone, and in lower-priced tablets like Acer’s Iconia B1 and Asustek Computer’s (華碩) MeMO Pad HD 7.

The company said last month it expected to ship 200 million smartphone chips this year and 15 million tablet chips.

Analysts said MediaTek was likely to ship 208 million smartphone chips and up to 25 million tablet chips this year, but warned that fierce price competition with Qualcomm Inc in the high-end market and Spreadtrum Communications Inc (展訊) in the low-end segment posed a challenge for MediaTek.