MediaTek Inc (聯發科) expects revenue in the first half of this year to grow 10 percent year-on-year, thanks to a rapid growth in 5G chip shipments this quarter, chief executive Rick Tsai (蔡力行) said yesterday.
The world’s second-biggest handset chip designer said that the COVID-19 pandemic affected the Chinese market in the first quarter and the effect is lingering this quarter, but it is confident about expansion of the 5G chip market.
The Hsinchu-based company said it entered the market as 5G technology began to thrive globally, and it is capturing early growth opportunities in the technology.
Photo courtesy of MediaTek Inc
“We shipped [5G chips] in the first quarter and expect to enjoy a high rate of growth in shipments in the second quarter,” Tsai told an annual shareholders’ meeting from the company’s headquarters.
The firm livestreamed the meeting as a virus prevention measure.
Hopefully, the growth momentum in the first half would carry over into the third and fourth quarters, Tsai said.
In the first five months of this year, revenue climbed 10.48 percent annually to NT$103.19 billion (US$3.47 billion), data showed.
MediaTek supplies comprehensive 5G product portfolios that cover chips for high-end, mid-end and entry-level cellphones, Tsai said.
The company earlier this year launched its first 5G system-on-chip (SoC), dubbed Dimensity 1000, for premium 5G phones and on May 18 unveiled its latest 5G SoC series, Density 820, which has been adopted by China’s Xiaomi Corp (小米) for its new Redmi 10X.
MediaTek aims to roll out its third 5G SoC family for entry-level phones later this year.
The company is gaining market share in the global 4G chip market, even though the pandemic has severely cut demand for 4G phones, Tsai said.
However, the pandemic has been boosting demand for chips used in Wi-Fi 6 routers and tablets, driven by work-from-home and remote schooling demand, he said.
Addressing shareholders’ concerns over growing competition from clients, which are stepping up efforts to develop and sell their own chips, MediaTek chairman Tsai Ming-kai (蔡明介) said that the company has faced such challenges for a long time.
“It did not happen yesterday. It happened five or 10 years ago,” he said. “The company’s strategy is to invest more in research and development, and offer good products that cater to customers’ needs.”
During the meeting, shareholders approved distribution of a cash dividend of NT$10.5 per common share, representing a 2.11 percent yield based on the company’s closing share price of NT$496.5 in Taipei trading yesterday.
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