MediaTek Inc (聯發科) yesterday said that revenue this quarter would hit the middle to high end of its forecast of about NT$71 billion (US$2.17 billion), given robust customer demand.
The handset chip designer which counts Xiaomi Inc (小米) among its clients is sticking to its target of an annual increase in revenue of 10 percent this year, MediaTek co-chief operating officer Jeffrey Ju (朱尚祖) told a media briefing.
Last year, the company posted revenue of NT$213.25 billion.
The company said emerging markets such as India would be the main growth engines this year, as growth in China’s smartphone market is slowing down.
“Our business is expected to be quite good this year. The best-selling handset in China is the Oppo R9, which is equipped with our product,” Ju said.
However, gross margin would continue to be under pressure, he said.
The company expects gross margin to trend down to between 35 percent and 38 percent this quarter, after hitting a record-low of 38.1 percent in the first quarter.
MediaTek said the company supplies handset chips to more than 100 companies, including China’s Lenovo Group Ltd (聯想), Letv.com (樂視網) and Meizu Technology Corp (魅族), and Japan’s Sony Corp, which have adopted MediaTek’s Helio-series chips for high and medium-end smartphones.
Its client list includes about 20 global telecom operators, the company added.
Ju said business in “the second quarter has been better than we estimated,” with resilient demand for mid to high-end smartphones in China.
Looking ahead, “we are cautiously optimistic about the third quarter,” he said.
MediaTek last month forecast that revenue would grow between 24 percent and 32 percent sequentially to between NT$69.3 billion and NT$73.8 billion, from the first quarter’s NT$55.91 billion.
The company does not have any plans to revise its forecast for the current quarter, chief financial officer David Ku (顧大為) said.
Mobile phone chips contributed more than 55 percent to MediaTek’s overall revenues in the first quarter.
Separately, MediaTek’s Internet of Things (IoT) chief JC Hsu (徐敬全) said that chips used in IoT applications would double their revenue contribution to about 10 percent of MediaTek’s overall revenues in the next three to five years.
At present, chips used in GPS and machine-to-machine devices for distant surveillance in factories account for about 60 percent of its IoT chip shipments, Hsu said.
Gowing forward, IoT chips used in smarthomes, wearables and the automotive sectors will be the major revenue sources and China will be its major market, Hsu said.
Chips used in IoT devices offer gross margins of more than 50 percent — the highest among its products, Hsu said.
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