MediaTek Inc (聯發科) yesterday became the nation’s second-most valuable listed company after its market capitalization climbed to NT$1.157 trillion (US$40.23 billion) amid investors’ optimism of new business opportunities, while Hon Hai Precision Industry Co (鴻海精密), a major assembler of Apple Inc’s iPhones, fell one notch to third with a market capitalization of NT$1.153 trillion.
The increase in MediaTek’s value came as its shares rallied 4.6 percent to close at NT$728 yesterday, as investors expected the handset chip supplier to benefit from Huawei Technologies Co’s (華為) decision to sell its low-to-mid-range smartphone business under the Honor (榮耀) sub-brand.
On Tuesday, Huawei announced on its Web site that it planned to sell its Honor smartphone business to Shenzhen Zhixin New Information Technology Co Ltd (深圳市智信新信息技術) in its latest efforts to fight US trade sanctions.
Photo: Lisa Wang, Taipei Times
MediaTek has stopped shipping chips to Huawei since the US ban took effect on Sept. 15.
The latest deal is a boon for MediaTek, as it could resume chip supply for Honor smartphones, if Washington exempts the brand under the new ownership from the sanctions, Jih Sun Securities Investment Consulting Co (日盛投顧) said in a note.
MediaTek supplies its 5G chip, Dimensity 800, to Honor phones.
Honor’s other local suppliers, including Novatek Microelectronics Corp (聯詠科技) and Sensortek Technology Corp (昇佳), would also benefit from Huawei cutting ties with the smartphone brand, Jih Sun said.
Novatek supplies integrated circuits for Honor displays, while Sensortek supplies optical sensors, it said.
Huawei annually shipped between 60 million and 70 million Honor phones over the past few years, the consultancy said.
However, MediaTek said it is cautious about the effect.
Asked about potential shipments to Honor, MediaTek chief executive officer Rick Tsai (蔡力行) said that the company is assessing the situation.
“The deal has just been announced,” Tsai said.
However, MediaTek is not concerned about its competitor, Qualcomm Inc, that received the US government’s approval to ship 4G chips to Huawei, Tsai said, adding that MediaTek has outperformed its competitors and this year gained market share in the 4G and 5G mobile phone chip segments worldwide, he said.
“Since smartphone demand is to rebound next year, we are not worried. The world economy will be in a good shape next year,” Tsai said.
MediaTek last month forecast that global 5G smartphone shipments would experience a high-speed growth next year, more than doubling from this year’s 200 million units.
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