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MediaTek cuts forecast for smartphone chips

Posted: 04 Aug 2015 ?? ?Print Version ?Bookmark and Share

Keywords:MediaTek? smartphone? LTE? Qualcomm? FinFET?

MediaTek has reduced its expectations for this year due to weaker demand for smartphones and stronger price competition for the handset chips that the company makes. The company slashed its forecast for 2015 shipments of smartphone chips to 400 million units from its earlier target of 450 million.

The company maintained its earlier expectation to sell 150 million LTE chips this year. MediaTek said it expects to ship 110-120 million smartphone chips in Q3. That forecast combined with its shipments in H1 implies that the company is likely to post flat growth in Q4.



"We do have a cautious view about Q4 due to the macro and micro economic situation," said MediaTek CFO David Ku.

Q2 net income was $200 million, down 49.2 per cent from the same period a year ago.

Gaining market share

The company has been gaining market share against market leader Qualcomm in China, the world's largest handset market, where the two companies have intensified price competition. MediaTek said it expects to grow its 4G market share in China to about 40 per cent by the end of 2015 on shipments of 150 million chips.

The company expects the global market for smartphones this year to grow by about 5-10 per cent from a year ago to reach 1.4 billion to 1.5 billion handsets.

Of that amount, China is likely to reach 700 million to 740 million units, growing about 20 per cent growth from last year. About 35-40 per cent of China's production will be exported, MediaTek said.

Globally, the company's expected shift to quad-core products has stalled and most of the demand remains with dual core. Demand next year may remain flat, according to the company.

During this year, MediaTek expects its smartphone shipment breakdown to fall in a range of 20-25 per cent for dual-core, 50-55 per cent for quad-core and 15-25 per cent for octa-core products.

Faster move to 16nm

While the demand outlook remains weak, MediaTek plans to accelerate its move to new chips made with Taiwan Semiconductor Manufacturing Co.'s 16nm FinFET process technology.


MediaTek will start commercial production of its high-end Helio product line on 16nm during 1H16 rather than H2 as the company originally expected.

"Getting to 16nm early should be a plus," Ku said.

The early introduction of 16nm will give MediaTek an advantage in its high-end products that have a gross margin that's better than the corporate average, he added. By 2H16, MediaTek plans to shift more of its mainstream products to 16nm as well.

- Alan Patterson
??EE Times

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