MediaTek Inc (聯發科), the world’s biggest smartphone chip designer, yesterday said its new artificial intelligence (AI) chips used in data centers are to account for 20 percent of its total revenue next year, as cloud service providers race to deploy AI infrastructure to meet voracious demand.
MediaTek is believed to be developing tensor processing units for Google, which are used in AI applications.
While it did not confirm such reports, MediaTek said its new application-specific IC (ASIC) business would be a new growth engine for the company.
Photo: CNA
It again hiked its forecast for the addressable ASIC market to US$70 billion by 2028, compared with an estimate of US$50 billion from three months ago. The company stuck to its target of seizing a 10 to 15 percent share of that market by 2028.
MediaTek expects its data center ASIC business to contribute US$1 billion to revenue this year and far more next year, company chairman and chief executive officer Rick Tsai (蔡力行) told an online investors’ conference.
The company said it has landed a second data center ASIC project and has more in the pipeline with new revenue expected to come in 2028.
“Twenty percent is something we believe we have a reasonable chance to get to. We will do our best to achieve that,” Tsai said.
The ASIC business together with other non-smartphone segments are to help bolster MediaTek’s revenue growth this year, as it expects a “tough year” for cellphones and its mobile phone chip business.
Surges in memorychip prices would deal a blow to smartphone sales, the company said, adding that it would work with customers to adjust product portfolios to mitigate the impact.
MediaTek expected “significant” revenue decline for its smartphone chip business during the current quarter. The segment is the biggest contributor to the company, accounting for 59 percent of total revenue last quarter.
Overall this quarter, the company expects revenue to reach between NT$141.2 billion and NT$150.2 billion (US$4.47 billion and US$4.76 billion), indicating that revenue would be flattish or fall 6 percent sequentially from last quarter’s NT$150.19 billion. That would represent an annual contraction of 2 to 8 percent.
Gross margin is expected to be between 45.5 percent and 47.5 percent this quarter, compared with 46.1 percent last quarter.
For the year, MediaTek aims to sustain gross margin at 46 percent, chief financial officer David Ku (顧大為) said.
To cope with mounting pressure from cost increases due to capacity tightness in global supply chains, MediaTek is in discussions to pass on some of the increases to customers, Ku said.
MediaTek reported NT$105.32 billion in net profit for last year, edging 1 percent lower from NT$106.39 billion in 2024, while earnings per share dropped slightly to NT$66.16 from NT$66.92.
Revenue expanded 12.3 percent year-on-year to about NT$596 billion, setting an all-time high. Smartphone chip revenue rose to a record high, exceeding US$10 billion, thanks to strong demand for its flagship chips, which contributed US$3 billion in revenue.
Smart device chip revenue last year grew to more than US$3 billion, which is expected to carry into this year, the company said.
Power management chip revenue is expected to be flattish this year, it added.
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