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MediaTek's 4G business sees slow growth in 2016

Posted: 02 Feb 2016 ?? ?Print Version ?Bookmark and Share

Keywords:4G? LTE chips? processor?

The projection for MediaTek's 4G business looks dim this 2016, a stark contrast to its bright market-share gains last year. However, MediaTek is reserving its overall forecast for 2016 due to uncertainties about the global market and competition.

"We're still looking to extend our 4G market share," said MediaTek Senior Vice President David Ku on a conference call to announce the company's fourth-quarter 2015 results. "Our 4G growth rate should be higher than the industry end-market growth."

MediaTek expects the global 4G market this year to grow within a range of 5 per cent to 10 per cent from 1.4 billion units in 2015. Last year, the company shipped about 150 million long-term evolution (LTE) chips in the high end of the 4G segment. Overall, MediaTek shipped about 400 million smartphone chips in 2015 as it entered the business in competition with Qualcomm.

MediaTe

Companies in the smartphone business may need to adjust to slower sales after market research firm International Data Corporation (IDG) reported that shipment growth in 2015 slowed to 9.8 per cent last year, ending years of double-digit increases on an annual basis.

Shipment growth in China, the key market for MediaTek, is likely to drop to the low single-digit range, according to IDC.

MediaTek forecast that shipments of its smartphone product mix will shift toward its high-end Helio chips this year. The company forecast that Helio products will account for about 20 per cent of its smartphone shipments this year, increasing from about 10 per cent last year.

Currently, the X10 is the company's main Helio offering. By the second half of this year, MediaTek plans to boost production of its ten-core X20, followed by the first processor in its mainstream P series, the P10, made on Taiwan Semiconductor Manufacturing Co?s (TSMC's) 28nm HPC+ process.

"The X10, X20 and P10 probably will be the majority of the Helio products for the first half this year," Ku said. "Once we get into the second half, we?ll also have the P20 coming in." MediaTek will make the P20 using TSMC?s 16nm FinFET process. MediaTek is planning an x30 product for 2017.

MediaTek aims to offer two to three new entry-level LTE products this year. The first, initially named the 6737, including a Category 4 modem, will start to ship in the second quarter. The two other products, with Cat 6 modems, will start to ship around second half this year.

Outlook

The company said it expects 2016 revenue to increase by more than 10 per cent from last year as smartphone and internet of things (IoT) devices deliver ?double-digit? growth. However, the company did predict that its first-quarter 2016 shipments of smartphone and tablet semiconductors will fall in a range of 100 million to 110 million units compared with 91 million units in the first quarter of 2015.

In addition to MediaTek?s handset customers in China such as Xiaomi and Huawei, the company is counting on LG of South Korea and Sony of Japan to expand global sales this year.

MediaTek?s share in the Chinese-built smartphone market has been around 45-50 per cent. To grow its market share, the company will need to continue driving into more top-tier handsets and push Chinese customers and brands into more developed markets.

- Alan Patterson





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