MediaTek Inc (聯發科), the world’s biggest 5G smartphone chip designer, yesterday said that it expects revenue this quarter to return to growth at an annual rate of 17 percent at best, with the momentum to extend into the whole of next year given improving channel inventory, particularly on the smartphone front.
MediaTek’s inventory has returned to a healthy level of about 90 days following five consecutive quarters of effort, the chip designer told an online investors’ conference.
MediaTek customers also started replenishing mobile phone chips, which has helped drive earnings and would push its revenue to its highest in about five quarters, the company said.
.Photo: CNA
Revenue is expected to expand 11 to 17 percent year-on-year to between NT$120 billion and NT$126.6 billion (US$3.7 billion and US$3.9 billion) this quarter, MediaTek said.
That would be sequential growth of 9 to 15 percent from revenue of NT$110.1 billion last quarter, it said.
Gross margin would be 45.5 to 48.5 percent this quarter compared with 47.4 percent last quarter, the firm said.
“In the fourth quarter, we expect the strength in our mobile phone [business] to more than offset the seasonal decline of smart edge platforms,” MediaTek chief executive officer Rick Tsai (蔡力行) said.
Mobile phone chip revenue is to extend the growth trend and at a faster pace than last quarter’s 19 percent sequential increase, which was mainly fueled by the introduction of its new Dimensity 9300 flagship processor, Tsai said.
The new processor is expected to reach the market early next month.
The Dimensity 9300 processor, the third-generation MediaTek flagship mobile phone chip, is built on 3-nanometer process technology, the most advanced available from Taiwan Semiconductor Manufacturing Co (台積電), Tsai said.
The new processor elevates CPU and GPU performance, and has a powerful artificial-intelligence (AI) processing unit, which is optimized to run large-language models for generative AI.
MediaTek plans to unveil more processors with AI functions next year.
Generative AI features are “a must-have capability in our offering,” Tsai said.
Increasing computing capabilities, the proliferation of edge AI and increased adoption of semiconductor content for automotive applications would provide strong growth opportunities for MediaTek, he said.
Investors asked about any potential threat to MediaTek after Huawei Technology Co’s (華為) latest premium phone, the p60 Pro powered by a 7-nanometer processor, became a focal point of the market in the past few months.
Huawei was forced to exit the 5G market in 2019 due to the US’ technology curbs.
“We have no question in our mind that we are enabling our customers to compete effectively against whoever comes into the market, because we have great products,” Tsai said in response to an investor’s question. “At the end of the day, emotion can work for some time. I would expect rational consumer behaviors will prevail very shortly.”
Some customers would seek better and more advanced process technologies to satisfy demand for stronger computing power for gamers and generative AI features on mobile phones, MediaTek said.
Net profit climbed 15.9 percent to NT$18.57 billion during the quarter ended Sept. 30 compared with NT$16.02 billion in the second quarter, the firm said.
Last quarter’s earnings were the best since the fourth quarter last year, it said.
On an annual basis, net profit plunged 40.3 percent from NT$31.09 billion.
The company’s board of directors yesterday approved its first semi-annual cash dividend of NT$24.6 per common share made up of NT$16.6 of a regular cash dividend and NT$8 of a special cash dividend.
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