MediaTek Inc (聯發科), the world’s largest 5G smartphone chip supplier, yesterday said it expects revenue to grow about 15 percent each year for the next three years, buoyed by its swift technology migrations and expansions in addressable markets.
The Hsinchu-based chipmaker’s strong projection came after reporting 53.2 percent annual revenue growth last year to a record NT$493.4 billion (US$17.73 billion), a step closer to its target of US$20 billion revenue.
MediaTek attributed the strong growth to its early sub-6 gigahertz 5G readiness, and its support of WiFi 6 technologies, helping it capture business opportunities as new products were introduced.
Photo: CNA
The chipmaker seized a 35 percent share of North America’s 5G Android phone chip market last year.
With rising 5G penetration rates and the proliferation of smart edge devices worldwide, MediaTek expects its markets to increase to US$140 billion in 2024, CEO Rick Tsai (蔡力行) told an investors’ teleconference yesterday.
“We believe we will enjoy a revenue compound annual growth rate of about 14 to 16 percent for the next three years with all business groups growing robustly,” Tsai said.
To concentrate its research-and-development resources on promising products, MediaTek streamlined its businesses and separated each into three groups: mobile phones, smart edge platforms and power management chips.
Mobile phone chips were MediaTek’s largest revenue generator last year, accounting for more than 50 percent of its business.
Revenue is to expand this year at a faster pace of 20 percent annually, fueled by growth across the board, 5G chips in particular.
MediaTek aims to double its 5G smartphone chip shipments from regions outside China, including North America, Europe, India and emerging countries, Tsai said.
He said that 5G phones this year are expected to increase to 700 million units worldwide, comprising more than 50 percent of the world’s mobile phones, adding that the penetration rate of 5G phones was close to 40 percent last year.
Gross margin this year is to improve to between 48 percent and 50 percent, from 46.9 percent, on better product portfolios as MediaTek launches flagship 5G chips under its Dimensity brand, along with new-generation WiFi 7 chips.
As the electronics industry enters a slow season, MediaTek expects revenue to rise at a slower rate of 2 percent to 10 percent this quarter, to NT$131.2 billion to NT$141.5 billion. That represents annual growth between 21 percent and 31 percent.
“For the first quarter of this year, we expect revenue from higher 5G adoption and flagship Dimensity 9000 shipments to offset lower seasonal demand for certain consumer products,” Tsai said.
“We also expect a shift toward high-value-added products across all revenue groups, which will benefit gross margin,” he added.
Gross margin this quarter is expected to be between 47.5 percent and 50.5 percent, compared with 49.6 percent last quarter.
Net profit last quarter climbed 6.3 percent quarter-on-quarter to NT$30.15 billion from NT$28.36 billion. On an annual basis, net profits last quarter doubled from NT$14.96 billion in the fourth quarter of 2020.
That brought last year’s net profit to a record NT$111.87 billion, up 170 percent from NT$41.44 billion in 2020. Earnings per share jumped to NT$70.56 last year from NT$26.01 in 2020.
Strong profits and a higher payout ratio of up to 85 percent should allow MediaTek to distribute a cash dividend of NT$72 to NT$76 per share next year. That includes a special cash dividend of NT$16 per share for four years starting this year.
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