Company Reports

MediaTek has offered up to USD 3.9 billion in five-year convertible bonds to Nvidia, Alphabet, and other investors. The conversion price is TWD 4,513.75, 15% above the previous close and represents 1.7% of predeal outstanding shares. Nvidia subscribed to USD 3.5 billion. MediaTek shares popped 10%.

Having fortified its market share in midrange smartphones, MediaTek is vying for presence in premium models. The company is upping its game in premium chips, planning to stand toe-to-toe with Apple by releasing a chipset made on a 2-nanometer process in late 2026. We expect MediaTek to maintain its higher market share in mobile systems-on-chip, or mobile SoCs, which have improved relative to Qualcomm in the past two years. That said, there is no room to be complacent, as Samsung and Apple taking market share will be bad news for MediaTek, as both design SoCs in-house. The recent 5G Open Resource Architecture can further MediaTek’s efforts to lock in customers as it offers unparalleled customization options on the chip level for carefully segmented performance for different prices and niche markets.

MediaTek raised its 2026 artificial intelligence application-specific integrated circuits, or ASICs, target market share to 15%-20% from 10%-15% in 2027. It estimates the serviceable available market for AI ASICs will reach USD 80 billion in 2027 and 'grow significantly' in 2028.

MediaTek doubled its 2026 revenue target for artificial intelligence application-specific integrated circuits to USD 2 billion. It now estimates the serviceable available market for AI ASICs to reach USD 70 billion-USD 80 billion in 2027 instead of 2028.

Having fortified its market share in midrange smartphones, MediaTek is vying for presence in premium models. The company is upping its game at premium chips, planning to stand toe-to-toe with Apple by releasing a chipset made on 2-nanometer process in late 2026. We expect MediaTek to maintain its higher market share in mobile SoCs, which have improved relative to Qualcomm in the past two years. That said, there is no room to be complacent as Samsung and Apple taking market share will be bad news for MediaTek, as both design SoCs in-house. The recent 5G Open Resource Architecture can further MediaTek’s efforts to lock in customers as it offers unparalleled customization options on the chip level for carefully segmented performance for different prices and niche markets.

MediaTek's December-quarter revenue was TWD 150 billion, up 5.7% from the prior quarter and met guidance. Management raised its serviceable available market estimate for artificial intelligence application-specific integrated circuits, or ASICs, to as high as USD 70 billion.

Having fortified its market share in midrange smartphones, MediaTek is vying for presence in premium models. The company is upping its game at premium chips, planning to stand toe-to-toe with Apple by releasing a chipset made on 2-nanometer process in late 2026. We expect MediaTek to maintain its higher market share in mobile SoCs, which have improved relative to Qualcomm in the past two years. That said, there is no room to be complacent as Samsung and Apple taking market share will be bad news for MediaTek, as both design SoCs in-house. The recent 5G Open Resource Architecture can further MediaTek’s efforts to lock in customers as it offers unparalleled customization options on the chip level for carefully segmented performance for different prices and niche markets.

MediaTek's September-quarter revenue was TWD 142 billion, down 5.5% from the prior quarter but better than the management guidance. Management expects USD 1 billion in revenue from artificial intelligence application-specific integrated circuits in 2026, and multibillions in 2027.

Having fortified its market share in midrange smartphones, MediaTek is vying for presence in premium models. The company is upping its game at premium chips, planning to release its fifth iteration in late 2025 with the latest technology, breaking away from its tendency to be a second adopter. We expect MediaTek to maintain its higher market share in mobile SoCs, which have improved relative to Qualcomm in the past two years. That said, there is no room to be complacent as Samsung and Apple taking market share will be bad news for MediaTek, as both design SoCs in-house. The recent 5G Open Resource Architecture can further MediaTek’s efforts to lock in customers as it offers unparalleled customization options on the chip level for carefully segmented performance for different prices and niche markets.

MediaTek's second quarter of 2025 revenue was TWD 150 billion, down 2% from prior quarter but meeting management guidance. Gross margin exceeded guidance at 49.1% due to one-off benefit from a long-term agreement. Management expects revenue to drop 10% in the third quarter.

MediaTek's first-quarter revenue was TWD 153 billion, up 11% from the prior quarter. Gross margin slid 390 basis points sequentially to 48.1%. Revenue exceeded guidance due to front-load shipments in artificial intelligence and smartphone chips.

MediaTek's fourth-quarter 2024 revenue was TWD 138 billion, up 6.5% year on year. Gross margin was up 0.2 percentage points from the year-ago quarter to 48.5%. The numbers exceeded guidance due to the top-of-the-line Dimensity 9400 chipset selling better than expected in China.

Having fortified its market share in midrange smartphones, MediaTek is vying for presence in premium models. The company is upping its game at premium chips, planning to release its fourth iteration in late 2024 with the latest technology, breaking away from its tendency to be a second adopter. We expect MediaTek to maintain its higher market share in mobile SoCs, which have improved relative to Qualcomm in the past two years. That said, there is no room to be complacent as Samsung and Apple taking market share will be bad news for MediaTek, as both design SoCs in-house. The recent 5G Open Resource Architecture can further MediaTek’s efforts to lock in customers as it offers unparalleled customization options on the chip level for carefully segmented performance for different prices and niche markets.

Our fair value estimate on MediaTek remains at TWD 1,400 with no change to our long-term view. MediaTek’s shares have become fairly valued as the market has priced in higher expectations of premium smartphone chipsets from 2026. Even though the stock’s upside is limited, we view MediaTek as a better play in artificial intelligence than some of our networking and component coverage if the stock retreats out of geopolitical fears.

Our fair value estimate on MediaTek remains at TWD 1,400 with no change to our long-term view. MediaTek's shares are attractive after pulling back amid slowing smartphone restocking as the market seems to underestimate customers' willingness to pay a premium for chips with topnotch artificial intelligence features and remains unconfident on the company's ventures in automotive and other tailored use cases.

We retain our fair value estimate for MediaTek of TWD 1,400 per share after slightly revising up 2024 numbers to account for updated guidance and first-quarter results, with no change to our long-term view. MediaTek’s share price is attractive, as we think the market underestimates customers’ willingness to pay a premium for chips with topnotch artificial intelligence features. In the long term, the know-how in AI on smartphones may be partially replicated on enterprise AI chips as the need for power efficiency is the same, which may pose upside potential to our base case.

We retain our fair value estimates on Taiwanese technology companies in our coverage following a powerful earthquake and multiple strong aftershocks near the eastern city of Hualien on April 3, namely: Advantech at TWD 337; Delta Electronics at TWD 331; GlobalWafers at TWD 710; Largan at TWD 3,000; MediaTek at TWD 1,400; Sino-American Silicon at TWD 281; Taiwan Semiconductor Manufacturing Co at TWD 950 (USD 151 per ADR); United Microelectronics Corp at TWD 70; and Win Semiconductors at TWD 245 per share.

We retain our fair value estimate on MediaTek at TWD 1,400 per share after rolling our model without changes to our underlying view. We find MediaTek undervalued for its continued ability to defend prices and take market share in the premium smartphone segment at the same time. Its long-term drivers in automotive, enterprise-use chips are more visible, with management signaling new categories of products to be shipped in late 2025. The key upside to our forecasts is MediaTek selling more expensive mobile chips due to demand induced by artificial intelligence, or AI, computing.

Having fortified its market share in midrange smartphones, MediaTek is vying for presence in premium models. The company is upping its game at premium chips, planning to release its third iteration in late 2023 with the latest technology, breaking away from its tendency to be a second adopter. We expect MediaTek to maintain its higher market share in mobile SoCs, which have improved relative to Qualcomm in the past two years. That said, there is no room to be complacent as Samsung and Apple taking market share will be bad news for MediaTek, as both design SoCs in-house. The recent 5G Open Resource Architecture can further MediaTek’s efforts to lock in customers as it offers unparalleled customization options on the chip level for carefully segmented performance for different prices and niche markets.

We hold our fair value estimates on MediaTek and Win Semiconductors at TWD 1,400 and TWD 245, respectively, after tweaks to our 2023 and 2024 estimates. We view inventory clearance has ended at both companies, and they will benefit from new launches from smartphone manufacturers. Both stocks are attractive in our view, as smartphone recovery has just begun and 5G proliferation should resume after a year of pause. Artificial intelligence is another bonus if it accelerates innovation on smartphones and other devices that attract consumers to replace their gadgets more frequently. MediaTek's and Win Semi's minimal exposure to a softening automotive market makes them good diversification targets against auto-heavy names in our coverage like Infineon and NXP.