MediaTek Q2 revenue down, maintains annual growth target

Taipei, July 31 (CNA) Taiwan-based smartphone IC designer MediaTek Inc. released its quarterly earnings report on Wednesday, showing a quarter-on-quarter drop in revenue for the second quarter of the year, but maintained its annual growth target at 14-16 percent in U.S. dollar terms.

The company reported a consolidated revenue of NT$127.27 billion (US$3.89 billion) in Q2, which although down 4.6 percent from the previous quarter, was a 29.7 percent increase year-on-year.

The company's quarterly gross margin dropped from 52.4 percent in Q1 to 48.8 percent, while its earnings per share fell from NT$19.85 to NT$16.19, according to the report.

In October, MediaTek will launch Dimension 9400, a flagship chip that uses the 3 nm process, which is expected to boost sales of flagship products by more than 50 percent for the year, company CEO Rick Tsai (蔡力行) said at an online investor conference held that day.

In addition, global shipments for smartphones could grow 1-3 percent this year, with the market penetration rate of the 5G transport network expected to reach 61-63 percent, he said.

As MediaTek is well positioned to take advantage of the growing popularity of cloud computing and edge computing, Tsai expects the company's new project to start contributing to revenue in the later half of 2025.

The company also predicted a continued stable performance in Q3.

Tsai said that market demand is stable, with the three main production lines of chips for mobile phones, smart devices and power management set to remain at the same level in the third quarter and expected to bring in NT$12.35 billion-NT$13.24 billion in revenue with a gross margin of 45.5-48.5 percent.

Regarding mobile phone chips, Tsai said that sales for 5G System on a Chip (SoC) are expected to drop, but demand for 4G SoC from emerging markets is forecast to rise, offsetting the fall.

As for smart devices, the steady performance of wireless and wired connection products will continue, while sales on computing devices and application specific integrated circuit (ASIC) will grow, he predicted.

Sales of smart televisions could also fall due to advance shipments, though the offsetting effect from different products will ensure the production line remain at a stable level, he added.