Sat, Oct 31, 2020 page12

• MediaTek Q3 profit soars 94%

  BRIGHT FUTURE: Despite US export restrictions keeping it from selling to Huawei, MediaTek expects its strong momentum to continue as it expands beyond China

  • By Lisa Wang / Staff reporter
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  MediaTek Inc (聯發科), the world’s second-biggest handset chip supplier, yesterday reported that net profit last quarter skyrocketed about 94 percent year-on-year to a record high, thanks to robust chip demand mainly for 5G smartphones and entry-level Chromebooks due to COVID-19 pandemic-driven remote schooling.

  Net profit surged to NT$13.37 billion (US$462.23 million) during the quarter ending on Sept. 30, compared with NT$6.9 billion in the same period last year. That represented quarterly growth of 82.8 percent from NT$7.31 billion.

  Gross margin improved to 44.2 percent, compared with 42.1 percent a year earlier and 43.5 percent in the previous quarter.

  

  A security guard walks outside the headquarters of semiconductor firm MediaTek Inc in Hsinchu on May 15.

  Photo: David Chang, EPA-EFE

  MediaTek expects the strong growth momentum to extend into this quarter, it said.

  “Following a strong third quarter, overall demand remains stable. We expect another quarter with significant year-on-year revenue growth,” company CEO Rick Tsai (蔡力行) told an investors’ teleconference.

  “On a quarter-on-quarter basis, we expect revenue from mobile computing and growth-area products [Internet of Things, application-specific integrated circuits and power management chips] to be better than normal seasonality,” he said.

  Revenue is forecast at NT$89.5 billion to NT$97.3 billion for this quarter, representing a flat quarter, or a quarterly contraction of 8 percent in the worst-case scenario, from last quarter’s NT$97.28 billion.

  Last quarter’s revenue hit a record high with each of the company’s three major product lines growing more than 40 percent quarter-on-quarter, the company said.

  The fourth-quarter revenue guidance does not include any revenue from Huawei Technologies Co (華為), as MediaTek stopped shipping chips to the Chinese company after the US imposed export restrictions last month, it said.

  Gross margin would mostly go unchanged this quarter at about 43.5 percent, even though the company is shipping more low-to-mid-range 5G chips and there are unfavorable foreign-exchange rates, the chipmaker said.

  The company said that mainstream 5G phones equipped with its new Dimensity 720 chip are to ramp up this quarter.

  It also plans to launch a new 5G system-on-chip (SoC) by the end of this year, targeting mass market 5G phones, it said.

  Its new 5G SoC for high-end smartphones would enter mass production early next year, MediaTek said.

  The company has a more than 40 percent share of the world’s 5G smartphone market and expects to gain more share next year.

  MediaTek is expanding its 5G footprint beyond China with LG Electronics Inc adopting its high-end Dimensity 1000 chip, while China’s Oppo Mobile Telecommunications Corp (歐珀) also plans to launch a new model in Europe with its Dimensity 800 chip.

  The chipmaker faces supply constraints for wafers used in power management chips, but expects no significant impact, as the situation is still “manageable,” it said.

  To secure sufficient wafer supply, the company said that it has ordered NT$1.62 billion of manufacturing equipment, which it would lease to its wafer suppliers.
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