MediaTek seeks growth outside China

MediaTek grew more than 20 percent in 2009, a year when the semiconductor industry as a whole declined by about 10 percent. In contrast, 2010 has seen the wireless chip vendor growing 6 percent to 8 percent, compared with 30 percent growth for the chip sector at large. Ranked 17th in the world in chip revenue in 2009, MediaTek, sometimes referred to as the Qualcomm of Asia, is expected to rank at 21 in chip revenue this year, according to market researcher IC Insights, down from its position at 19 in 2009.

The company's sales have grown from less than $1.5 billion in 2005 to a projected $3.5 billion-plus this year. This growth has been achieved because of its dominant position in the China cellular chip market. But companies such as Spreadtrum Communications Co. Ltd have been cutting into its market share with aggressive pricing.

Analysts at UBM TechInsights have provided a comprehensive overview of MediaTek. The report examines the organization, technology, product portfolio, design wins and partnerships of MediaTek, and offers a detailed look at the company's IP positions and patent portfolio.

According to UBM, the company which was spun out of foundry United Microelectronics Corp. in 1997 is intent on moving on from sockets in low-end handsets and other products in the China market to design wins with bigger companies in other regions.

"MediaTek is trying to get out of the low-end markets and position itself as a player with tier 1 companies," says Gordon Holstead, a senior analyst for business intelligence at UBM TechInsights and a co-author of the MediaTek study.

TechInsights concludes that MediaTek is pinning its growth plan on markets outside of China, including India and North America. In hopes of boosting margins and securing design wins in higher-end handsets, the company in July licensed technology for Long Term Evolution (LTE) from NTT Docomo. It is now shipping a multimedia GSM/GPRS solution that UBM TechInsights says integrates the baseband, RF and power management on one chip.