MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates.
The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback.
“As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,” MediaTek chief executive officer Rick Tsai (蔡力行) told an online investors’ conference.
Photo: Annabelle Chih, Bloomberg
Even so, MediaTek plans to roll out more new products to boost revenue growth this quarter, including a new flagship mobile phone chip, the Dimensity 9500 series, and a GB10 chip that it is codeveloping with Nvidia Corp for the US firms’ DGX Spark artificial intelligence (AI) supercomputers.
The company is also working with Nvidia on C-X1, a computer hub integrated with Nvidia’s Blackwell chips.
The project would start to contribute revenue next year, Tsai said.
Investors asked about MediaTek’s progress in developing its first application-specific IC (ASIC) used in data centers amid concerns about potential delays.
MediaTek downplayed the concerns, saying that its goal is to make revenue of US$1 billion from its ASIC business next year.
“We believe our customers are doing well in their tape-out progress. In addition, we are also engaging with cloud service providers” (CSPs), Tsai said.
The global AI ASIC market is estimated at US$40 billion in the mid-to-long term, thanks to rising demand for custom chips from CSPs, he said.
MediaTek expects full-year revenue this year to expand at an annual rate of 15 percent — assuming no foreign exchange rate effects — as supply chain inventory is returning to healthy levels.
By segment, revenue from its flagship mobile phone chips would expand at an annual pace of 40 percent to US$3 billion this year and connectivity chips such as Wi-Fi 7 chips would also grow to US$3 billion, MediaTek said.
Revenue from chips used in tablets and computers would surge 80 percent annually to US$1 billion, it said.
MediaTek expects a strong NT dollar to weaken its gross margin with each 1 percent appreciation of local currency to reduce its gross margin by 0.2 percentage points.
As a result, gross margin this quarter is to drop to between 45.5 and 48.5 percent, compared with 49.1 percent last quarter, it said.
The company’s net profit in the second quarter declined 5 percent to NT$27.85 billion, compared with NT$29.33 billion in the first quarter. That represented an annual growth of 8.3 percent from NT$25.72 billion.
Earnings per share were NT$17.5, compared with NT$18.43 in the previous quarter and NT$16.19 in the second quarter last year.
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