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MediaTek Revenues To Meet Guidance In Q1; Rise 10-20% In Q2

March 17, 2016 - Written By Kishalaya Kundu

Earlier this month, Taiwanese semiconductor company MediaTek released its earnings report for February, 2016, revealing that it had earned consolidated revenues of NT$13.24 billion ($404.7 million) in the past month. Although statistically, the revenue was the lowest the company had earned in twelve months, it was still a significant increase over February 2015, and analysts in general gave the company’s stock a thumbs up, saying that they believed the company was on track meet its guidance of NT$52.5 – 57.4 billion ($1.6 billion – 1.75 billion) in the first quarter of this year. Now, sources quoted by Taiwanese media seem to indicate that MediaTek’s second quarter revenues will see a sequential quarter-on-quarter increase of between 10 to 20 percent in Q2, 2016, which should certainly be reassuring for the company’s shareholders.

Taiwan Semiconductor Manufacturing Company (TSMC), the company whose foundry MediaTek uses to manufacture its mobile chipsets, suffered a setback last month when an earthquake hit Southern Taiwan, interrupting production and damaging wafers. However, that may not have hurt the company as much as originally feared, seeing as the company is still on course to meet its revenue target for the quarter. Although growing competition in the mobile processor market has resulted in a steady erosion of the company’s gross margins to less than 40 percent in the final quarter of last year, rising demand for newer handsets in China is expected to offset some of the ill effects of the reduction in margin, going forward. According to insiders, the recent spurt in demand is being fueled in large part by the heavy subsidies that are being offered by the carriers in the country.

MediaTek is expected to launch new chips built on TSMC’s 10nm FinFET Plus technology in the second half of this year, in addition to the Helio P20 and X20 series SoCs that were unveiled recently by the company. While the Helio P20 is a mid-range chipset with an octa-core CPU, the Helio X20 happens to be the latest top-tier SoC from MediaTek, and comes with a deca-core CPU architecture with eight Cortex-A53 cores and two Cortex-A72 cores. Last month, the company also announced a number of new processing chipsets aimed at IoT devices, smart wearables and home entertainment products.