MediaTek Inc (聯發科), the world’s biggest mobile phone chip supplier, yesterday said it is upbeat about market demand in the long term, driven by accelerating digital transformation worldwide.
The company’s comments came in response to shareholders’ concern about chip demand after smartphones and PC sales weakened over the past six months.
The outbreak of the COVID-19 pandemic stimulated massive demand for computers, communications and consumer electronics, as people worked remotely and learned from home, MediaTek chairman Tsai Ming-kai (蔡明介) said.
Photo courtesy of MediaTek Inc
“Over the past half year, demand has reduced, as some demand has been satisfied, or because countries in Europe and the US have reopened and returned to normal life,” Tsai said. “Demand does not disappear... We do not see a major issue [with demand] in the long run.”
MediaTek expects revenue to grow 15 percent annually over the next three years, outpacing the global semiconductor industry, CEO Rick Tsai (蔡力行) said.
“The global semiconductor industry has faced external headwinds [lately], but long-term prospects are optimistic,” Rick Tsai said.
To attain long-term growth momentum, MediaTek in February reorganized its business into two groups — the wireless segment and the computing, connectivity and metaverse segment (CCM).
The company said faster upgrade of Wi-Fi technology is among the growth drivers for its CCM business.
“We cannot solely rely on the wireless segment to grow [our business]. Our new CCM business is the focus,” Tsai said.
Smartphone chips accounted for 53 percent of the company’s total revenue last quarter, thanks to rising 5G smartphone adoption.
MediaTek shareholders yesterday approved a plan to distribute a cash dividend of NT$73 per common share — NT$57 per share from its earnings last year and a special cash dividend of NT$16 per share — the highest in the company’s history. That translates into a payout ratio of about 80 percent, compared with earnings per share of NT$70.56 last year.
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