MediaTek, the world’s third-largest chip designer, said it will meet its target set earlier this year to ship 150 million long-term evolution (LTE) chips this year.

The Hsinchu, Taiwan-based company has wrestled with slowing smartphone growth and increased competition from rivals such as Spreadtrum in China. Global smartphone growth is expected to slow to 10.4% this year, down from 27.5% in 2014, according to market research firm IDC.

Reaching the 150 million unit target “should be no problem,” MediaTek Chief Financial Officer David Ku, said in a conference call with analysts to announce the company’s third-quarter financial results. During the current fourth quarter, MediaTek will probably ship 95 million to 105 million smartphone chips, of which more than half will be LTE products, he said.

MediaTek occupies a sweet spot in China, the largest market for smartphones, where it sells most of its chips to handset makers such as Xiaomi, the number-three supplier after Apple and Samsung. However, shipments in China are forecast to grow just 1.2% 2015 compared with 19.7% in 2014, according to IDC. China’s share of the global market is expected to drop from nearly 33% to 23.1% in 2019 as high-growth markets like India expand, according to IDC.

MediaTek sees early signs of 4G picking up in emerging markets such as India, where the company has been expanding its business with local handset makers, Ku said. “We still see room to grow.”

Even so, MediaTek’s business this year, including smartphones, tablets and smart TV products, will be “flat to slightly down”, according to Ku. The company’s third-quarter sales revenue was NT$57 billion ($1.8 billion) down 0.9% from the same period in 2014. Net income plunged by 40% from the third quarter a year ago on increased price competition.

MediaTek is rolling up its sleeves as it continues to aim for higher-end chips in its multi-core Helio product line, announced earlier this year. The company expects the move to high end 4G chips will help to increase its market share in a segment where profits are better.

By the end of the first quarter in 2016, the company plans to shift from 20nm technology to roll out a new version of the Helio using the 16nm FinFET process from Taiwan Semiconductor Manufacturing Co. (TSMC), MediaTek said. MediaTek may become one of the largest customers for TSMC’s 16nm process by next year, after Apple, according to analysts surveyed by EE Times.

MediaTek will launch an additional 2-3 versions of the Helio during the rest of 2016, according to Ku. Higher average selling prices for the new chips should cover the increased cost of the move to 16nm, he said.

As part of its effort to expand beyond the China market, MediaTek aims to get CAT 6 certification by the end of this year to tap into business with US carriers such as Verizon, the company said. By the second half of 2016, the company plans to have CAT 10 certification.

By: DocMemory
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