MediaTek Inc (聯發科) yesterday raised its revenue growth forecast for this year for the second time, buoyed by higher average selling prices and market share gains amid increasing 5G penetration worldwide.
The chip designer now expects revenue to grow 52 percent from last year, up from the 45 percent growth it estimated three months ago.
As a result, revenue this year would surpass NT$480 billion (US$17.24 billion), a new record and up from NT$322.15 billion last year.
Photo courtesy of MediaTek Inc
“The strong performance in both revenue growth and gross margin” improvement will not be limited to next year only, MediaTek chief executive officer Rick Tsai (蔡力行) told a teleconference yesterday. “We also believe the same strengths during the past few years will carry us through 2022. We expect 2022 will be another year of solid revenue growth with healthy profitability.”
MediaTek has secured “good enough [chip] supply” to meet business targets next year, although chip supply constraints are expected to last for another year, Tsai said.
Gross margin is expected to climb to 46.2 percent this year, compared with 43.9 percent last year, the company said.
The launch of higher-margin flagship 5G chips would help lift gross margin, it said.
MediaTek expects strong growth in its 5G chip shipments and increases in blended average selling price next year, Tsai said.
The company also sees a broader uptake of its 5G chips in the US, Europe, India and other regions by global brands, following adoption of its chips by all major mobile phone vendors in China, he said.
MediaTek said it expects further market share expansion in the North American market to 35 percent of Android-powered smartphones this year, nibbling at the turf of San Diego, California-based Qualcomm Inc.
Asked about the impact from a growing trend of mobile phone and computer makers designing their own chips — for example Oppo Mobile Telecommunications Corp (歐珀) and Google — Tsai said that MediaTek’s rich intellectual property library would be helpful, given how complicated chip design is.
“We see it as a new business opportunity,” he said.
For this quarter, MediaTek expects weak seasonality, mostly due to faltering smartphone chip demand, but said growth momentum would resume next quarter.
Mobile phone chips made up 56 percent of its revenue last quarter, it said.
Revenue this quarter is forecast to be between NT$120.6 billion and NT$131.1 billion, or flat to a quarterly slide of 8 percent, Tsai said.
However, revenue would expand from last year by about 25 percent, he said.
Gross margin is expected to climb to about 47.5 percent this quarter, he said.
In the third quarter, MediaTek reported net profit surged 112.2 percent to NT$28.36 billion from NT$13.37 billion a year earlier and 2.8 percent from NT$27.59 billion the previous quarter.
Earnings per share jumped to NT$17.92 last quarter, compared with NT$8.4 a year earlier and NT$17.44 in the second quarter.
Gross margin in the third quarter was 46.7 percent, up from 44.2 percent at the same time last year and 46.2 percent in the prior quarter.
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