MediaTek Inc , the worldfs No. 2 mobile phone chip supplier, yesterday posted its best quarterly net profit in about three years, as a significant gain from divesting itself of an investment in Goodix Technology Inc bolstered its bottom line.

Net profit more than doubled to NT$10.16 billion (US$349 million) during the final quarter of last year, compared with NT$5.06 billion in the previous quarter.

That translated into earnings per share of NT$6.5, up from NT$3.26. On an annual basis, it meant a 98 percent expansion from NT$5.14 billion, or NT$3.23 per share.

However, operating income plunged 74 percent quarter-on-quarter from NT$4.96 billion to NT$1.29 billion last quarter. That represented a year-on-year decline of 68 percent.

The slump indicated soft smartphone demand, primarily from China, MediaTek said.

MediaTek expects the weakness to carry into the current quarter as smartphone demand is not recovering yet.

gThe fourth and first quarters are traditionally slow seasons. We have seen market demand continue to be sluggish,h MediaTek co-chief executive officer Rick Tsai (äï—͍s) told investors.

gChinese clients are conservative about placing orders,h Tsai said.

Revenue is expected to shrink between 12 percent and 20 percent, from NT$60.4 billion last quarter to between NT$48.3 billion and NT$53.2 billion this quarter, Tsai said.

The shipments of chips used in smartphones and tablets are expected to slump about 30 percent quarter-on-quarter from between 110 million and 115 million last quarter to between 75 million and 85 million, the chipmaker said.

However, MediaTek expects gross margin to gain between 36 percent and 38 percent from 37.4 percent last quarter, following a 1 percentage point improvement.

MediaTek attributed the improvement to customersf adoption of its new smartphone chips from its mid-to-low-end Helio P series.

The company is confident that it can this year recoup some of its smartphone chip market share and to lift its profitability, Tsai said.

As worldwide smartphone shipments are expected to experience slow growth this year due to high penetration and a longer handset replacement cycle, the companyfs focus is shifting toward new products, including chips used in data center switches, gsmarth speakers and application-specific integrated circuits, Tsai said.

Those chips are likely to see 30 percent growth this year and a double-digit-percent growth in revenue over the next two to three years, he said.

In related news, Tsai is to become the companyfs sole chief executive officer, as company chairman Tsai Ming-kai is to relinquish his role, MediaTek said in a filing with the Taiwan Stock Exchange.

By: DocMemory
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