MediaTek Inc (聯發科), the world’s biggest smartphone chip designer, yesterday reported 18-percent quarterly decline in net income for last quarter after customers’ inventory restocking demand peaked and revenue to be lukewarm this quarter.
The smartphone chip designer’s second-quarter net income fell to NT$29.96 billion (US$912.41 million) from NT$31.66 billion in the first quarter, but on an annual basis it jumped 62 percent.
Earnings per share last quarter dropped to NT$16.19, from NT$19.85 a quarter earlier, but rose from NT$10.07 a year earlier.
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“We see revenue being flattish in the third quarter, because some customers are still consuming their inventories,” MediaTek vice chairman and chief executive officer Rick Tsai (蔡力行) told an online investors’ conference.
Revenue this quarter is expected to range from NT$123.5 billion to NT$132.4 billion, compared with NT$127.27 billion last quarter, Tsai said.
Gross margin would slide to 45.5 to 48.5 percent, from 48.8 percent in the second quarter, he said.
The weakness is expected to extend into next quarter, which is usually a low season, MediaTek said.
“From the second quarter, we are moving into a normal pattern in terms of seasonality. So the fourth quarter basically follows that pattern,” Tsai said.
While the company plans in October to introduce a new flagship mobile processor, the Dimensity 9400, it maintains its full-year financial forecast for this year, as customers remain prudent regarding inventory management, Tsai said.
In April, MediaTek projected that this year’s revenue would expand about 15 percent year-on-year.
The new chip enables handset makers to squeeze in more artificial intelligence features than in the Dimensity 9300, Tsai said.
It is made using Taiwan Semiconductor Manufacturing Co’s (台積電) 3-nanometer technology to deliver a higher average selling price than its predecessor, he said.
As a result, Tsai said he is confident that MediaTek’s revenue from flagship mobile processors would grow more than 50 percent annually this year, and that the momentum would carry into next year.
MediaTek’s new application-specific IC business is on track and the business is expected to start contributing revenue in the second half of next year, Tsai said.
As most cloud-based data center operators are proactive about developing customized chips to reduce the total cost of ownership, MediaTek believes it is well-positioned to serve that market, given its advanced technology, abundant intellectual property portfolio and flexible business models, Tsai said.
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