MediaTek expects to post about a 10% revenue increase in 2016. However, due to continued-intense competition in the handset-IC market, the company's gross margin is unlikely to rebound to 40%, according to company VP and president CJ Hsieh.

MediaTek will be committed to optimizing its cost structure, said Hsieh, adding that operating costs will rise only 3-5% in 2016.

For the first quarter of 2016, MediaTek's revenues will fall 7-15% sequentially to between NT$52.5 billion (US$1.57 billion) and NT$57.4 billion. Gross margin will range from 37% to 40%, Hsieh indicated.

MediaTek expects to ship a total of 100-150 million chips for smartphones in the first quarter of 2016. Nevertheless, the company will no longer provide its annual shipment target, Hsieh added.

MediaTek's gross margin fell 4.2pp sequentially to 38.5% in the fourth quarter of 2015, while net profits declined 47.5% on quarter to NT$4.18 billion. EPS for the fourth quarter was NT$2.83.

MediaTek reported consolidated revenues for the fourth quarter increased 8.3% sequentially to NT$61.71 billion, thanks to its acquisition of analog IC specialist Richtek Technology.

Revenues generated from MediaTek's smartphone- and tablet-use chips accounted for 55-60% of the company's total revenues in the fourth quarter of 2015, followed by those from its home entertainment products with 30-35%. Sales of MediaTek's IoT-related chips made up the remaining 10-15%.

MediaTek's revenues for 2015 totaled NT$213.26 billion, rising 0.1%, while gross margin slid 5.6pp on year to 43.2%. The company had net profits of NT$25.77 billion in 2015, down 44.5%, with EPS coming to NT$16.60.

Hsieh noted that MediaTek's 16nm-made smartphone solutions will enter their mass production stage in the second half of 2016. Meanwhile, the company is set to roll out a new series built using a more-advanced 10nm process in the latter half of the year followed by volume production in early 2017, Hsieh said.

MediaTek's Helio-series chips targeted at the high-end smartphone market segment are expected to account for more than 20% of MediaTek's total handset-IC shipments in 2016, up from only 8% in 2015, according to Hsieh.

By: DocMemory
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