The growing posture of Qualcomm’s chipsets continues to be at the detriment of rival chipmakers especially Taiwanese fabless chip manufacturer MediaTek. It has been disclosed that the company expects to post a revenue decline of 12-20% sequentially in the first quarter of 2019, and flat or slight revenue growth in all of the year.
MediaTek reported consolidated revenues declined 9.2% sequentially to NT$60.89 billion (US$1.98 billion) in the fourth quarter of 2018, due mainly to a seasonal slowdown in demand for consumer electronics. Gross margin grew 0.4pp on quarter to 38.9%, thanks to a favourable product mix. Also, the Taiwanese chipmaker generated net profits of NT$3.75 billion in the fourth quarter, down 45.4% sequentially, with EPS coming to NT$2.42. MediaTek’s consolidated revenues for all of 2018 slipped 0.1% to NT$238.06 billion when gross margin climbed 2.9pp on year to 38.5%. The company posted net profits of NT$20.78 billion in 2018, down 13.7%, with EPS reaching NT$13.26.
According to MediaTek’s CEO Rick Tsai, the company is aware of decelerating smartphone growth. He also added that the global smartphone market growth will remain slow until 5G-compatible devices become commercially available. MediaTek is stepping up the development of its 5G-enabled solutions, and expects to introduce its 5G SoC series at the end of 2019 following the launch of its 5G modem chip in the first half of the year, Tsai indicated. The company will also roll out its new chip solutions for the next-generation Wi-Fi technology – Wi-Fi 6 (802.11ax), and automotive electronics products in 2019, Tsai also disclosed. The company will continue to diversify its offerings for further product mix improvement, Tsai added. The CEO noted that improvement in the company’s product mix is bearing fruit. Thus, the company expects to post a gross margin of 38-41% in the first quarter of 2019 despite an anticipated revenue fall of up to 20%.