MediaTek’s latest financial disclosure revealed it improved its third-quarter revenue by 44.7 percent from the same period in 2019. The Taiwanese chipmaker grew its business thanks to increased demand for personal electronics.
The firm also offered a forecast for the fourth quarter that calls for continued double-digit income expansion.
MediaTek’s Strong Q3 Performance
MediaTek made NT$97.2 billion ($3.4 billion) last period, up from the NT$67.2 billion ($2.35 billion) in Q3 2019. The corporation’s increased sales allowed it to bring its net income to NT$13.3 billion ($465.7 million), up 93.7 percent annually. The firm also significantly bettered its inventory turnover, going from 83 days last year to 57 days last period.
In an earnings call, CEO Dr. Rick Tsai explained his employer saw significant growth in Q3 due to shifting end-market preferences.
MediaTek’s Internet of Things (IoT) component, power management integrated circuit (PMIC), and application-specific integrated circuit (ASIC) segment spiked because of increased interest from consumer products manufacturers. Similarly, the chipmaker’s mobile computing business improved thanks to a surge in demand for Chromebooks.
Based on its Q3 financial disclosure, the chipmaker similarly benefited from the coronavirus pandemic’s impact on the global electronics market. Homebound employees and students brought a lot of new hardware to facilitate working from home. As MediaTek makes first-rate broadband router chips, smart TV parts, and notebook processors, it benefited from the recent upgrade trend.
The corporation also experienced a positive revenue change related to the ongoing deployment of fifth-generation mobile data networks. Tsai noted his employer recently launched its Dimensity 1000 chipsets in the U.S. markets via partnerships with T-Mobile and LG. That product introduction helped the firm expand its global 5G footprint and its income.
A Very Happy Holiday Season
For the December quarter, MediaTek expects to generate between NT$89.5 billion ($3.13 billion) and NT$97.3 billion ($3.4 billion). The firm’s guidance indicates it expects between 38.3 to 50 percent annual growth in Q4. Though it typically sees a holiday season revenue boost, its projection is atypically robust.
Tsai told market analysts his company had experienced a sequential decline in demand for its offerings. Nevertheless, the chief executive is bullish about the prospects of the Dimensity 800 system-on-a-chip (SoCs), which will launch in Europe this quarter. He also expressed optimism about the performance of its Dimensity 720 chipsets in Q4.
In addition, MediaTek believes the mounting global adoption of 5G technology will translate to brisk sales of fifth-generation networking components.
Tsai also indirectly commented on the corporation’s efforts to secure a trade license from the U.S. government to resume its business relationship with Huawei. He told Arete Research partner Brett Simpson the company’s Q4 forecast accounts for revenue from the telecom. That indicates the chipmaker’s request for an export control exemption has not been granted as of yet.
Despite the instability of the current marketplace, MediaTek is in a good place right now. Its portfolio is aligned with current consumer priorities, and its development of emerging technologies like 5G reflects a forward-looking roadmap. Global trade conflicts and the pandemic make 2021 a major question mark, but the corporation seems well-equipped to take on tomorrow’s challenges.