MediaTek Inc (聯發科) shares dove 3.12 percent yesterday amid Wall Street routs, despite the handset chip designer providing a strong financial outlook for this year.
The Dow Jones Industrial Average and Standard & Poor’s 500 index overnight plunged 2.05 percent and 2.57 percent respectively amid US Federal Reserve concern over the economic outlook in the US, which pressured the TAIEX to fall 1.82 percent yesterday.
MediaTek shares closed at NT$869 in Taipei trading.
Photo: EPA-EFE
In an earnings conference on Wednesday, MediaTek said this year would be “another year of strong revenue growth, in spite of strong New Taiwan dollar appreciation,” after revenue last year grew 30.8 percent to a record NT$322.15 billion (US$11.33 billion) on market share gains in the mid and entry-level phone segments with its 5G Dimensity chips.
The Hsinchu-based company said that global 5G smartphone shipments are expected to expand to 500 million units this year, more than doubling from last year’s 200 million units.
About 60 percent of the 5G phones would be for China, it said.
“Our 5G market share has already exceeded 40 percent in markets we served in 2020. We aim to further increase the share this year,” MediaTek chief executive officer Rick Tsai (蔡力行) told a teleconference, looking at markets in the US, Japan and Europe.
MediaTek already has a strong foothold in China.
The company also expects to ship its first 5G chips made on Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) advanced 5-nanometer technology soon, and it has made progress in developing 5G chips supporting millimeter-wave technology with volume production scheduled for next year, it said.
Gross margin is expected to remain between 43 and 44 percent this year, after reaching 43.9 percent last year, Tsai said.
MediaTek said that it would maintain gross margin at between 42 and 45 percent this quarter, a traditionally slack season, compared with 44.5 percent last quarter.
“We see above-seasonal demand in the first quarter, despite the issue of supply constraint,” Tsai said. “Mobile computing revenue is expected to increase significantly this quarter from last quarter, and more than double from a year ago.”
The company projected first-quarter revenue to be between NT$96.4 billion and NT$104.1 billion, flat or up 8 percent from last quarter.
Revenue generated from 5G chips is to surpass that from 4G chips for the first time this quarter, it said.
Chip supply tightness would continue at least through the next couple of quarters, MediaTek said, adding that it would secure sufficient capacity from wafer suppliers.
MediaTek reported net profit of NT$14.75 billion for last quarter, up 11.9 percent quarter-on-quarter and 134 percent year-on-year, due to strong demand for processors used in 5G smartphones, Chromebooks and new chips for wireless equipment.
For the whole of last year, net profit surged 77.6 percent to NT$40.92 billion from NT$23.03 billion in 2019.
Earnings per share climbed to NT$26.01 from NT$14.69.
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