Handset chip designer MediaTek Inc (聯發科) yesterday reported that fourth-quarter net profit increased 56.6 percent annually to NT$6.38 billion (US$211.78 million), driving net profit for the whole of last year up 11.7 percent to NT$23.2 billion.
As a result, earnings per share reached NT$14.69 for last year, a 1.43 percent year-on-year increase.
“Last year was a solid year for MediaTek, with financial results much improved... We have strengthened our position in the global market,” MediaTek CEO Rick Tsai (蔡力行) told an investors’ conference yesterday, citing that the company’s gross margin rose to 41.9 percent and its operating profit margin to 9.2 percent.
The company aims to keep its first-quarter gross margin between 40.5 percent and 43.5 percent, but revenue is expected to fall due to the 2019 novel coronavirus outbreak.
MediaTek forecast a 7 to 15 percent sequential decline in sales this quarter to between NT$55 billion and NT$60.2 billion.
“Despite the coronavirus crisis, the effect on an annual basis should be manageable,” Tsai said, explaining that although the company ships to clients in China, those clients are selling their handsets on the global market.
“We are currently witnessing strong demand for our 4G chips,” he said, adding that overall shipments this year would increase on an annual basis.
The launch of MediaTek’s second 5G system-on-chip (SoC), dubbed the Dimensity 800, is on schedule for the end of next quarter, after the company started shipping its flagship Dimensity 1000.
“We have been communicating with our business partners over the past two weeks... Our people have been working together closely to ensure that there will be no delay in product launches,” Tsai said, adding that a third-generation chip would be ready in the second half of the year.
The upcoming chips are part of an effort to target mid-range handsets, as well as those at the top, he added.
Predicting overall shipments of 170 million to 200 million 5G smartphones worldwide this year, Tsai said that he aims to capture about 40 percent of the total market share based on the life cycle of a 5G smartphone.
While the average price of 5G chips is much higher than that of 4G chips, the demand for 4G chips remains strong, MediaTek chief financial officer David Ku (顧大為) said.
“We have achieved a greater market share for 4G chips, with improved profitability,” Ku said, adding that 4G chips would increase revenue this year for MediaTek’s mobile computing segment, which contributes about 40 percent of the handset chip designer’s overall revenue.
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