MediaTek Inc (聯發科), which competes with Qualcomm Inc in China’s handset chip market, yesterday posted its weakest monthly revenue in five months for last month, as demand shrank amid customer inventory correction during the slack season.
Revenue fell 22.36 percent to NT$16.77 billion (US$538 million) last month, compared with a record high of NT$21.6 billion in October, according to a company statement. However, last month’s revenue rose 30.82 percent from NT$12.82 billion a year earlier.
Analysts said MediaTek’s sales could continue to fall this month in reflection of fourth-quarter inventory adjustments among its clients. After China’s Oct. 1 to Oct. 7 National Day holidays, demand for high-tech gadgets began showing signs of slowing, analysts said.
MediaTek chief financial officer David Ku (顧大為) yesterday said the downtrend is expected to carry into this month and even next quarter, blaming seasonal factors behind the weakness.
On an annual basis, revenue for next quarter will still be higher than the first quarter of this year at NT$46 billion, Ku said.
“Demand in China looks normal now,” Ku said. “We are seeing seasonal weakness, but we still expect annual growth [in revenue] in the first quarter as demand for 4G [chips] will continue to rise.”
MediaTek holds a 20 percent share of China’s 4G market, lagging behind rival Qualcomm’s 60 to 70 percent, according to MediaTek.
Commenting on the current quarter’s outlook, Ku said “our [previous] view remains unchanged.”
The company last month projected revenue for this quarter would be between NT$54 billion and NT$58.6 billion, indicating a sales guidance from a 6 percent sequential decline to a 2 percent increase from last quarter.
Shipments of 4G smartphone chips are expected to rise to 30 million units this quarter, while overall smartphone chips would be flat from last quarter’s 100 million units, the company said.
Analysts said higher 4G smartphone chip shipments are expected to improve MediaTek’s gross margin and its bottom line in the near future.
In the first 11 months, cumulative revenue surged 59.38 percent to NT$195.99 billion from NT$122.97 billion in the same period of last year, according to MediaTek’s tallies.
Separately, memorychip maker Winbond Electronics Corp (華邦電) said yesterday that revenue for last month rose 14.71 percent from a year earlier and 0.62 percent from the previous month to NT$3.22 billion.
In the first 11 months, the company’s cumulative revenue rose 14.44 percent to NT$34.85 billion from NT$30.45 billion in the same period of last year, Winbond said in a statement.
Additional reporting by CNA
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