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MediaTek expects Q4 revenue to drop 15 percent

by on03 November 2016

Increasing production of 28nm chips

Earlier this week, MediaTek reported a net profit growth of 19 percent during the third quarter of 2016, but now expects revenue momentum to slow down in the fourth quarter as it ramps up production capacity of 28nm chips.

According to company vice chairman Mr. Hsieh Ching-jiang, investors can expect a revenue decline anywhere between seven and 15 percent, or between NT $66.6 billion ($2.11 billion) and NT $72.9 billion ($2.31 billion), while gross margins are expected to remain between 33.5 percent and 36.5 percent.

The reason for the decline is because foundries are still catching up with tight 28nm production demands, and supply constraints are likely to remain until the end of the year. MediaTek also notes that customer demand for certain products is slowing down, including smartphone and tablet chip shipments, and 4G modems.

The company’s overall smartphone and tablet chip shipments will decrease from 145 to 155 million units in Q3 to around 135 to 145 million in Q4, or around seven percent. Revenues came in at NT $78.4 billion ($2.49 billion) last quarter, or 37.6 percent higher compared to last year.

Meanwhile, the company is scheduled to announce its next-generation Helio chips at the end of this year, with volume production beginning in 2017. It will announce the high-end X30 SoC based on 10nm design and featuring a Cat 10 modem at the end of this year, followed by some entry-level and mid-range chips featuring Cat 7 modems sometime next year.

Last modified on 04 November 2016
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