MediaTek Inc (聯發科), the nation’s biggest handset chipmaker, yesterday said first-quarter net income jumped 59 percent as China’s Lunar New Year holiday shopping spree spurred demand for its handset and TV chips.
Net income grew to NT$11.13 billion (US$354.3 million), or NT$10.29 per share, in the first quarter, from NT$7 billion, or NT$6.47 a share, in the same period of last year. That represented a 27.3 percent increase from last quarter’s NT$8.75 billion, or NT$8.08 per share.
MediaTek president Ching-Jiang Hsieh (謝清江) said market share expansion in emerging markets, especially China, and recovering demand for DVD storage also helped boost growth.
“Channel inventory in Chinese and other emerging markets looks stable based on our available information,” Hsieh said. “The Labor Day vacation [starting today] will help stimulate mobile phone demand in the Chinese market.”
However, that probably would not offset tepid demand this quarter in the saturating cellphone market in China, he said.
Hsieh said he was generally optimistic about demand for all of Mediatek’s products in the second quarter.
This quarter, revenues are expected to rise 2 percent to NT$33.3 billion at best, compared with last quarter’s NT$32.71 billion in the first three months of this year, of which handset chips accounted for the biggest portion, or a share of as much as 75 percent. The worst scenario would be that revenues could drop 5 percent quarter-on-quarter to NT$31.1 billion, according to the chipmaker.
The forecast fell short of expectations of 6 percent quarter-on-quarter revenue growth forecast by BNP Securities analyst Eric Chen (陳慧明).
After 2 percentage points of quarterly decline last quarter, gross margin is expected to rise slightly to 57 percent this quarter, from 56.7 percent in the January-March period, helped by its shift to higher-margin products and better cost efficiency, Hsieh said.
Chen expected improvement of MediaTek’s gross margin in the second half of the year, supported by increasing shipments of higher-priced silicon-on-chip solutions.
New 3G WCDMA chips also made progress, MediaTek said. The chipmaker is ready to ship such chips to European telecom operator Orange after completing qualification, and other well-known telecom carriers and first-tier handset makers are also qualifying its products, Hsieh said.
MediaTek planned to deliver chips for Android smartphones in the second half of this year, following the sales of chips for smartphones running Microsoft Corp’s system early this year, Hsieh said.
MediaTek also said it has shipped several million units of its new TD-SCDMA chips to Chinese handset makers ZTE Corp (中興通訊) and Yulong Computer Telecommunication Scientific (Shenzhen) Co (宇通計算機通信) Ltd, which sells handsets under the Coolpad brand, and LG Electronics of South Korea.
MediaTek kept its shipment target of handset chips unchanged at 450 million units this year.
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