Gross margin for the quarter will be better than the prior quarter's level thanks to a more favorable product mix.

MediaTek wants to ship more than 110 million SoC chips for smartphones and tablets in the second quarter.

Company vice chairman Ching-jiang Hsieh said at an April 28 investors' conference that smartphone demand is picking up slowly, but should start to accelerate at the end of the second quarter when inventory in the smartphone industry supply chain drops.

MediaTek's 10nm Helio X30 chips are already in mass production at TSMC. MediaTek's 10nm smartphone chips will only be a insignificant portion of company revenues in 2017, when 16nm and 28nm products remain MediaTek's major smartphone-IC product lines.

MediaTek will use TSMC's 12nm process technology to build a new SoC solution targeted at mid-range smartphones later in 2017. The company will also move forward rolling out its next-generation product using a more-advanced 7nm process node, Hsieh noted.

Hsieh predicted that smartphone demand worldwide will come to 1.6-1.7 billion units in 2017, which will represent a single-digit increase compared to 2016. For MediaTek, it could be a challenge to post smartphone-chip shipment growth in 2017.

Digitimes claims that MediaTek's smartphone-chip shipments for the first half of 2017 will reach just over 200 million units, which means the shipments will have to jump over 50 percent in the second half of the year in order to top the early 500 million units shipped in 2016.