MediaTek Inc (聯發科), the world’s biggest supplier of chips used in 5G smartphones, yesterday said it is to increase its research and development (R&D) budget by 10 to 20 percent this year as it continues to broaden its product portfolio beyond mobile phone chips.
The Hsinchu-based fabless company is seeking to grow by investing heavily in R&D in new fields, including chips for ARM-based Chromebooks, vehicles and industrial Internet of Things (IIoT) devices.
Last year, MediaTek spent 29 percent more on R&D — NT$100 billion (US$3.62 billion) — while its revenue soared about 53 percent to NT$493.41 billion, driven primarily by strong demand for its 5G handset chips.
The company attributed the growth to its aggressive investments in new-generation technologies and product development, helping it catch rivals in migrating into the 5G era.
MediaTek has seized about a 30 percent share of the Android-based 5G smartphone chip market in North America, which used to be a weak spot for it.
Over the past four years, MediaTek has sought to strike a balance between its major product lines: mobile phones, IoT, computing and application-specific ICs, smart home applications and power management chips.
About three years ago, MediaTek tapped into chips for in-vehicle information systems and telematics.
In August last year, the company invested NT$1 billion in shares of local industrial computer company Ennoconn Corp (樺漢科技) to expand its reach into the IoT sector.
Mobile phones chips remained the biggest revenue source for MediaTek, accounting for 56 percent of its revenue in the third quarter last year, although the figure has fallen from more than 60 percent at its peak.
Aside from expanding its R&D budget, MediaTek also plans to accelerate talent recruitment this year by adding about 2,000 engineers, with most of the openings in Taiwan.
As of the end of last year, MediaTek’s workforce was more than 19,300 globally.
The firm’s recruitment reflects its confidence about across-the-board growth this year.
The company is scheduled to hold a quarterly investors’ conference on Jan. 27, during which MediaTek chief executive officer Rick Tsai (蔡力行) is to speak about its business outlook for this quarter.
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