Chip designer MediaTek Inc (聯發科) yesterday reported its best profit in five quarters, thanks to stronger-than-expected demand for its flagship smartphone chips.
Net profit last quarter jumped 38.9 percent sequentially and 38.8 percent annually to NT$25.66 billion (US$819.8 million), as its gross margin improved to 48.3 percent from 47.4 percent the previous quarter and 48.3 percent a year earlier.
On an annual basis, however, net profit slid 34.8 percent to NT$76.98 billion from NT$118.14 billion in 2022.
Photo: CNA
Earnings per share dropped to NT$48.51 from NT$74.95 the prior year, although the figure remains the third-highest in the company’s history, it said.
Gross margin last year slid to 47.8 percent from 49.4 percent in 2022, MediaTek said.
The Hsinchu-based company expects a “year of growth” this year, driven by its flagship smartphone chips.
Flagship smartphone chip revenue is expected to see “very strong” double-digit percentage growth this year on an annual basis, following last year’s 70 percent growth to more than US$1 billion, MediaTek said.
Gross margin is estimated to reach between 45.5 percent and 48.5 percent, the company said.
“We also observe that generative artificial intelligence [AI] is driving smartphone upgrades and creating a bigger market for flagship and high-end smartphones,” MediaTek CEO Rick Tsai (蔡力行) said at a teleconference. “The continuous 5G migration and market share expansion of our flagship chips will be key drivers for our mobile phone business this year.”
Chinese smartphone vendors Oppo Mobile Telecommunications Corp (歐珀), Xiaomi Corp (小米) and iQoo adopted MediaTek’s flagship Dimensity 9300 chip for their premium phones with generative AI features, Tsai said.
The company also extended generative AI to its premium segment with Dimnesity 8300, he said.
As the company continues to explore new growth engines, it expects several new businesses to begin volume production from late next year, he said.
With that, MediaTek sees this year as the beginning of its next growth trajectory, he added.
The company expects global smartphone shipments this year to grow at a low-single-digit percentage to 1.2 billion units, with 5G models’ penetration rate climbing to the low-60s from a high 50s in terms of percentage last year.
The company’s revenue this quarter is forecast to grow between 27 and 35 percent annually to between NT$121.8 billion and NT$129.6 billion, as inventories return to normal throughout the supply chain, it said.
Sequentially, revenue this quarter would be flat to down 6 percent from NT$129.56 billion last quarter. Mobile phone chips made up about 64 percent of last quarter’s revenue, the company said.
MediaTek yesterday promoted chief financial officer David Ku (顧大為) to double as a chief operating officer (COO), together with Joe Chen (陳冠州), ushering in a corporate structure with two COOs supervising its operations.
The personnel adjustments take effect today.
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