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.
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
TECH WINNERS: Taiwan and South Korea reported robust trade, which suggests that they have critical advantages in the rapidly expanding AI supply chain, an official said Exports last month surged to a new high, as booming demand tied to artificial intelligence (AI) infrastructure fueled shipments of advanced technology components, underscoring the nation’s pivotal role in the global semiconductor supply chain. Outbound shipments climbed to US$80.18 billion, the highest ever for a single month, rising 61.8 percent from a year earlier and marking the 29th consecutive month of growth, the Ministry of Finance said yesterday. “The surge was driven primarily by global investment in AI infrastructure,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) said. The mass production of next-generation AI computing systems has accelerated procurement across the semiconductor supply
RSS