MediaTek Inc (聯發科) shares posted their best week since 2002, as artificial intelligence (AI) advances at its client Google help reshape the growth outlook for the Taiwanese chip designer.
The stock yesterday rose for a fifth-straight day in Taipei, taking its weekly gain to 22 percent, on investor enthusiasm over Google’s latest Gemini model and AI chip deals.
MediaTek has reportedly partnered with the Alphabet Inc unit on design of tensor processing units (TPUs), seen as a potential rival to Nvidia Corp chips in AI applications.
Photo: CNA
The stock price of MediaTek rallied 4.1 percent to NT$1,395 yesterday, ending the week 21.3 percent higher.
Known for its smartphone chips, MediaTek has suffered from a cloudy outlook for end-product demand, as well as margin pressure due to competition and high development costs.
The AI news has brought relief for the shares, which are still down about 2 percent on the year.
China business remains tough into next year, but “Google TPU upside should offset the smartphone headwind in the longer term,” Morgan Stanley analysts Charlie Chan (詹家鴻) and Daniel Yen (顏志天) said.
They upgraded the stock to overweight from equal-weight on Thursday.
The early days of AI centered on the training of large language models (LLM), which requires the massive computing power provided by graphic processing units such as those from Nvidia.
The shift in focus to inference — or how LLMs respond to user queries — is putting a spotlight on application-specific integrated circuits (ASIC), such as TPUs.
UBS Group AG analysts led by Sunny Lin (林莉鈞) raised their estimate for MediaTek’s sales contribution from TPUs in 2027 to US$4 billion from US$1.8 billion.
The analysts see the chips accounting for 20 percent of the company’s operating profit by 2028, “depending on execution by MediaTek and Google,” they wrote in a note on Thursday.
Part of this week’s excitement was due to news that Meta Platforms Inc is in discussions to use Google TPUs in data centers in 2027.
UBS sees further potential upside for MediaTek from additional ASIC projects with Meta.
The sell-side overall is bullish on MediaTek, with 23 buy recommendations, 10 holds and no sells. The consensus price target projects a further 9 percent rise in the stock over the next year.
In terms of future AI stock investing, Macquarie Group Ltd analysts including Arthur Lai said they “lean more” toward MediaTek and other Google partners over the Nvidia supply chain.
“We view the current AI surge as less a speculative bubble, but rather a necessary, capital-intensive build-out of a new, foundational technology layer,” they wrote in a report this week.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
RSS