Smartphone chip designer Media-Tek Inc (聯發科) yesterday said that it would perform better than the seasonal pattern with revenue forecast to grow 2 percent quarterly, thanks to robust demand for its new flagship smartphone chip that enables PC-like artificial intelligence (AI) features on phones.
The strong demand for the new Dimensity 9400 chip this year prompted MediaTek to raise its flagship smartphone chip revenue growth to 70 percent year-on-year, up from of an earlier estimate of 50 percent growth.
“For the fourth quarter, the strong ramp of Dimensity 9400 is expected to offset the lower seasonal demand for the mainstream and entry segments. Therefore, we expect mobile phone [platform] revenue to grow sequentially,” MediaTek vice chairman and chief executive officer Rick Tsai (蔡力行) told an online investors’ conference.
Photo: Ritchie B. Tongo, EPA-EFE
Dimensity 9400 has been better received by customers, compared with its predecessor, Dimensity 9300, in the initial adoption stage, Tsai said.
Market Share
China’s first-tier brands such as Vivo (維沃), Oppo (歐珀) and Redmi (紅米) have used the flagship chip from MediaTek in their phones, he said.
The new chip would help MediaTek elevate its market share in China to about 30 percent of premium smartphones this year, Tsai said.
With the new economic stimulus packages, MediaTek is “more comfortable with China’s economy now and going forward,” Tsai said.
“There was more uncertainty a year ago,” he added.
Tsai declined to comment if the new chip would help MediaTek reach non-Chinese brands like Samsung Electronics Co and Alphabet Inc’s Google.
Samsung adopted MediaTek’s chips in its tablets last quarter, Tsai said.
The company expects this quarter’s revenue to reach NT$126.5 billion to NT$134.5 billion (US$3.95 billion to US$4.3 billion), he said.
It posted NT$131.81 billion of revenue last quarter.
This year, revenue would expand 20 percent to 21 percent, or NT$519 billion to NT$526 billion, year-on-year surpassing the company’s mid-teens percentage growth target, MediaTek said.
Smartphone chips are the biggest revenue contributor to the company and accounted for 54 percent of its revenue last quarter.
Gross Margin
It would achieve its gross margin target range of 46 percent to 48 percent this year, the company said.
Gross margin is expected to fall this quarter to 46.6 percent to 48.5 percent, it said.
MediaTek reported a gross margin of 48.8 percent last quarter, beating its expectation of 48.5 percent.
Net profit last quarter surged 37.8 percent year-on-year to NT$25.59 billion, marking the third-highest level in all third quarters. That represented a sequential decline of 1.4 percent from NT$25.96 billion.
Earnings per share rose to NT$15.94 last quarter from NT$11.64 a year earlier, but they declined from NT$16.19 a quarter earlier.
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