MediaTek Inc (聯發科), the largest integrated circuit designer in Taiwan, has realized its sales guidance for the second quarter of this year after last month’s revenue rose to a seven-month high.
For the April-to-June period, the IC designer reported NT$58.08 billion (US$1.9 billion) in consolidated sales, up 3.56 percent from a quarter earlier.
The second-quarter figure came within the company’s earlier guidance of between NT$56.1 billion and NT$60.6 billion in sales.
MediaTek last month posted a double-digit increase in sales as Chinese smartphone brands unveiled new models.
Consolidated sales last month reached NT$21.89 billion, up 18.75 percent from a month earlier, the company said.
MediaTek faces escalating competition in the global smartphone chip market and has seen its market share shrink as it failed to adjust its product portfolio to meet clients’ needs, analysts said.
Earlier this year, MediaTek chairman Tsai Ming-kai (蔡明介) said the firm was determined to improve its product mix.
Tsai said that 4G products in the company’s flagship Helio-series smartphone chips have secured orders from major Chinese brands for the second half of this year, which are expected to stabilize the company’s profit margin and eventually raise its market share.
Meanwhile, an Asia-based brokerage raised its target price for MediaTek shares from NT$206 to NT$355, citing the company’s continued efforts to improve chip design and cut operating costs.
MediaTek is forecast to see its smartphone chip gross margin increase to 30 percent next year and 34 percent in 2019, from about 25 percent this year, the brokerage said in a note.
It added that while US-based rival Qualcomm Inc has focused on 5G smartphone chip development, MediaTek is expected to see its foothold in the 3G and 4G market getting firmer.
MediaTek shares on Friday fell 1.19 percent to close at NT$250.
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