MediaTek Inc (聯發科) yesterday posted its best quarterly net profit in five quarters, thanks to robust demand for handsets bearing its chips in China, India and Southeast Asia during a peak season.
Global visibility for 5G handsets and related applications is now much clearer than it was three months ago, as telecoms prepare to launch commercial 5G services next year, the mobile phone chip designer said.
“We expect the global 5G market to experience significant growth next year. We will play a vital role in the market,” MediaTek chief executive officer Rick Tsai (蔡力行) told an investors’ conference in Taipei.
The company would vie for a decent 5G market share in China, which would not be lower than its 4G market share, Tsai said.
MediaTek controls about 40 to 50 percent of China’s 4G handset chip market.
It in July raised its projection for worldwide 5G smartphone shipments to 140 million units next year and said that 100 million units would come from China.
The chipmaker this quarter shipped its first 5G system-on-chip (SoC) products in preparation for clients’ new smartphone launches in the first quarter of next year.
MediaTek said it expects its second line of 5G SoC products to hit the market in the second quarter, targeting mid-range smartphones, adding that it is developing a third line of 5G SoC products for affordable phones.
It expects to complete 5G chip verification with US and European telecoms next year and plans to expand its 5G chips to non-smartphone devices, the company said.
Its 5G SoC products boost its gross margin, it added.
MediaTek said revenue this quarter is expected at best to remain at last quarter’s NT$67.22 billion (US$2.2 billion), propelled by demand for 4G handset chips and shipments of its first 5G SoC products.
In the worst-case scenario, revenue could shrink 8 percent quarterly to NT$61.8 billion, given a slow season effect, it said.
Gross margin is expected to reach 43.5 to 40.5 percent this quarter, compared with 42 percent last quarter, when it rose for the fifth quarter in a row.
Net profit last quarter rose 6.1 percent quarterly to NT$6.9 billion, compared with NT$6.5 billion in the previous quarter. On an annual basis, net profit increased 2.5 percent from NT$6.73 billion.
Earnings per share rose to NT$4.38, from NT$4.11 a quarter earlier and NT$4.3 a year earlier.
Revenue rose 9.2 percent quarterly and 0.3 percent annually.
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