MediaTek Inc (聯發科), one of the world’s largest handset chip designers, yesterday reported that revenue last quarter declined 5.1 percent quarter-on-quarter, hitting the low end of the range estimated by the company.
During the fourth quarter of last year, revenue fell to NT$60.4 billion (US$2.05 billion), after revenue last month shrank 10 percent month-on-month, the lowest in seven months.
The chipmaker originally projected fourth-quarter revenue to fall between NT$59.2 billion and NT$64.3 billion, a range of a 7 percent reduction to a 1 percent increase, compared with the company’s revenue of NT$63.65 billion in the third quarter of last year.
Two months ago, MediaTek attributed its anemic estimates to a product transition period for its mobile chips and soft demand during the slow fourth quarter for chips used in consumer electronics such as TVs.
As hinted by the chip designer, last quarter’s growth might have been driven by a major shift in its mobile processor lineups, in which it increased its offering of medium and low-end mobile processors with the ultimate goal of recouping its market share and saving its gross margin from a downward spiral.
MediaTek’s whole-year revenue sank 13.54 percent to NT$238.216 billion, compared with NT$275.512 billion in 2016.
Processors used in mobile phones and tablets are the biggest sources of revenue, making up about 35 to 40 percent of the company’s revenue.
MediaTek co-CEO Rick Tsai (蔡力行) told reporters last month that the company’s mobile chip business has stabilized as reflected in the uptrend of the firm’s gross margin, thanks to an increase in customer orders for its new Helio P series of processors.
Product diversification, rather than just mobile chips, is to support the company’s medium to long-term growth, Tsai said.
MediaTek expects double-digit growth for its processors used in “smart” speakers, Internet-of-Things applications, as well as power management integrated circuits (ICs) and application-specific integrated circuit chips (ASICs) within the next one to two years.
The processors could account for 30 percent of the company’s revenue, the chipmaker said.
MediaTek is the biggest supplier of chips used in “smart” speakers with a market share of about 70 percent. The company expects global shipments of “smart” speakers to increase from 30 million units last year to more than 50 million this year, driven by rising demand from China, said Jerry Yu (游人傑), general manager of MediaTek’s entertainment business group.
Chips used in “smart” speakers contribute less than 5 percent to the company’s revenue, Yu said.
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