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Acquisitions Bump MediaTek’s October 2015 Revenue

November 6, 2015 - Written By David Steele

MediaTek have an impressive story to tell about mobile System-on-Chips. Their business started out creating reference designs for feature ‘phones, before branching out into smartphones and mobile processors. Early MediaTek designs and chips were relatively crude, but inexpensive. Their designs allows many businesses to build an own brand ‘phone, and later a smartphone, at minimal cost. Compared with the Qualcomm Snapdragons of the world, MediaTek’s chipsets lacked refinements such as integrated positioning and Internet radios, but were initially used in tablets. This is because the larger chassis meant that the device designers had more space for additional circuits associated with positioning systems and Internet radios. However, in the last couple of years, MediaTek have refined their mobile System-on-Chips and have and are releasing a number of innovative chips into the market, such as the ten core Helio X20 System-on-Chip, which uses three clusters of application cores in an attempt to balance high performance (from a dual core ARM Cortex-A72 cluster) with good battery life (from two quad core clusters of ARM Cortex-A53 application processors, with different maximum clock speeds). MediaTek’s innovative use of ARM Holdings’ big.LITTLE technology is a different approach to Qualcomm’s custom core mindset, which sees their up-and-coming flagship revert to a single quad core cluster of application processor cores.

In recent months, MediaTek have also invested in buying additional businesses, such as RichTek Technology. RichTek’s business is based around analog integrated circuits, such as power conversion circuits, drivers and amplifiers. This business has helped MediaTek produce record October revenues, which the company has just announced. Revenue for October 2015 stands at NT$22.24 billion, approximately US $685 million. This is up 11% from September (with a caveat) and almost 3% compared with the same time last year – essentially, MediaTek has bought a revenue stream here. However, the business also reported that the smart home solutions division has produced respectable returns during the month and this has helped matters. The caveat regarding MediaTek’s revenue figure is that month by month revenue has been volatile for the company and whilst an 11% gain over a month sounds like good news, we should not read too much into this statistic.

Against the short term positive news, MediaTek is facing pressure in the industry. It has become something of a victim of its own success: as MediaTek’s portfolio of mobile chipsets matures and gains similar refinements to its competitors (such as Samsung and Qualcomm), so the products become more expensive. This means that budget manufacturers are starting to look elsewhere for bargain basement chips, something that is reflected with MediaTek’s cumulative 2015 revenues to October showing at NT$174 billion, which is 3% lower than this time last year.