MediaTek Inc (聯發科), the nation’s top handset chipmaker, yesterday posted 17.7 percent sequential growth in net income in the first quarter boosted by higher-than-expected shipments of better-margin advanced smartphone chips.
During the quarter ending March 31, net income expanded to NT$10.81 billion (US$357 million), compared with NT$8.4 billion in the final quarter of last year, hitting a historic high.
The figure exceeded the NT$9.95 billion forecast by Credit Suisse analyst Randy Abrams and NT$9.48 billion forecast by Daiwa Capital Markets analyst Eric Chen (陳慧明).
“Demand for smartphones was quite strong in the first quarter. Smartphone are thriving in emerging markets,” MediaTek president Hsieh Ching-jiang (謝清江) told a conference call.
Chinese brands have expanded their presence in emerging markets such as India, Southeast Asia, Latin America, Africa, Russia and the Middle East, which has helped boost demand for dual-core and quad-core chips, Hsieh said.
Last quarter, shipments of smartphone chips increased to between 75 million and 80 million units, greatly surpassing the company’s forecast three months ago of 65 million units.
Advanced octa-core smartphone chips accounted for more than 10 percent of the total shipments last quarter, higher than the 5 percent to 10 percent share forecast by MediaTek, paving the way for the company to hit its target of a 10 percent to 15 percent share for the whole year.
MediaTek counts Xiaomi Corp (小米), Lenovo Group (聯想) and TCL Communication Technology Holdings Ltd among its clients.
The company expects the growth momentum to extend into the current quarter.
“Demand in emerging markets for smartphones remains robust in the second quarter... Demand from overseas markets [emerging markets, the US and Europe] will outpace demand in China,” Hsieh said.
Hsieh said demand for octa-core smartphone chips is growing rapidly this quarter after tier-one customers started using the chips in their phones last quarter.
Shipments of smartphone chips will grow 12.5 percent to 90 million units from the first quarter, Hsieh forecast.
Revenue is set to grow by between 12 percent and 20 percent sequentially to between NT$51.5 billion and NT$55.2 billion, compared with NT$46 billion in the first quarter, Hsieh said.
The growth rate is much faster than Abrams’ expectation of a 3.3 percent quarterly increase. Abrams maintained his “outperform” rating on MediaTek shares with a target price of NT$540, implying a 14.4 percent upside from the closing price of NT$472 yesterday.
“MediaTek offered a strong surprise at the gross-margin level, in addition to strong revenue guidance, which may trigger upward earnings revisions from analysts,” Chen said in a report yesterday.
MediaTek said its gross margin will climb to about 48.5 percent this quarter, from 48.3 percent in the first quarter.
“MediaTek may surprise investors again when it releases its second-quarter results. We are positive for its revenue and gross margin trend,” Chen said.
Daiwa maintained its “buy” rating on MediaTek shares.
To sustain growth, MediaTek plans to ship its first octa-core long-term evolution (LTE) chip in the third quarter ahead of its original schedule of the fourth quarter and it plans to ship its first 64-bit chip and wearable chips in the second half of the year.
Separately, United Microelectronics Corp (UMC, 聯電), the world’s No. 3 contract chipmaker, yesterday posted stronger-than-expected net profit of NT$1.18 billion for the first quarter.
That represented about 58 percent growth from NT$749 million in the prior quarter.
“For the second quarter of 2014, UMC will benefit from continued growth in customer demand, especially from the communications segment,” UMC chief executive Yen Po-wen (顏博文) said.
Shipments are set to grow by a low-teens percentage this quarter from last quarter’s 1.26 million units, while average selling price would stay unchanged, Yen said.
Factory utilization will be about 80 percent from last quarter’s 81 percent, while gross margin will improve to about 25 percent from 18.6 percent last quarter, Yen said.
Anna Bhobho, a 31-year-old housewife from rural Zimbabwe, was once a silent observer in her home, excluded from financial and family decisionmaking in the deeply patriarchal society. Today, she is a driver of change in her village, thanks to an electric tricycle she owns. In many parts of rural sub-Saharan Africa, women have long been excluded from mainstream economic activities such as operating public transportation. However, three-wheelers powered by green energy are reversing that trend, offering financial opportunities and a newfound sense of importance. “My husband now looks up to me to take care of a large chunk of expenses,
SECTOR LEADER: TSMC can increase capacity by as much as 20 percent or more in the advanced node part of the foundry market by 2030, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to lead its peers in the advanced 2-nanometer process technology, despite competition from Samsung Electronics Co and Intel Corp, TrendForce Corp analyst Joanne Chiao (喬安) said. TSMC’s sophisticated products and its large production scale are expected to allow the company to continue dominating the global 2-nanometer process market this year, Chiao said. The world’s largest contract chipmaker is scheduled to begin mass production of chips made on the 2-nanometer process in its Hsinchu fab in the second half of this year. It would also hold a ceremony on Monday next week to
State-run CPC Corp, Taiwan (CPC, 台灣中油) yesterday signed a letter of intent with Alaska Gasline Development Corp (AGDC), expressing an interest to buy liquefied natural gas (LNG) and invest in the latter’s Alaska LNG project, the Ministry of Economic Affairs said in a statement. Under the agreement, CPC is to participate in the project’s upstream gas investment to secure stable energy resources for Taiwan, the ministry said. The Alaska LNG project is jointly promoted by AGDC and major developer Glenfarne Group LLC, as Alaska plans to export up to 20 million tonnes of LNG annually from 2031. It involves constructing an 1,290km
TECH CLUSTER: The US company’s new office is in the Shalun Smart Green Energy Science City, a new AI industry base and cybersecurity hub in southern Taiwan US chip designer Advanced Micro Devices Inc (AMD) yesterday launched an office in Tainan’s Gueiren District (歸仁), marking a significant milestone in the development of southern Taiwan’s artificial intelligence (AI) industry, the Tainan City Government said in a statement. AMD Taiwan general manager Vincent Chern (陳民皓) presided over the opening ceremony for the company’s new office at the Shalun Smart Green Energy Science City (沙崙智慧綠能科學城), a new AI industry base and cybersecurity hub in southern Taiwan. Facilities in the new office include an information processing center, and a research and development (R&D) center, the Tainan Economic Development Bureau said. The Ministry
RSS