Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

Equity Bottom-Up

<ul><li>IC design firms remain positive about 2025 outlook despite uncertainties for 1Q25, showing resilience in the industry.</li><li>Taiwan evaluates consequences of Trump's potential revocation of China's trade status, highlighting potential geopolitical impacts.</li><li>JSR's construction of new EUV photoresist plant in S. Korea demonstrates commitment to meeting semiconductor demand in the region and globally.</li></ul>

IC design firms remain positive about 2025 outlook despite uncertainties for 1Q25, showing resilience in the industry.Taiwan evaluates consequences of Trump's potential revocation of China's trade status, highlighting potential geopolitical impacts.JSR's construction of new EUV photoresist plant in S. Korea demonstrates commitment to meeting semiconductor demand in the region and globally.

Tech Supply Chain Tracker (23-Nov-2024): IC design firms optimistic for 2025, cautious about 1Q25.

Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>3Q24 results are inline at the Operating level and 12% above Consensus at the Net Income level. 4Q guidance inline for revenues but 10% below Consensus at Operating level.</li>
<li>Smartphone revenues increased in 3Q24 on Premium AI-enabled chipset. However, 4Q revenue outlook is flat YoY and QoQ. The recovery period after the 2023 downturn seems to be ending.</li>
<li>The Mediatek conundrum is that the stock is expensive versus a slow 2025 outlook. Growth drivers exists but beyond 2025. <strong>In the short-term, the stock is unattractive</strong>.</li>
</ul>


3Q24 results are inline at the Operating level and 12% above Consensus at the Net Income level. 4Q guidance inline for revenues but 10% below Consensus at Operating level.
Smartphone revenues increased in 3Q24 on Premium AI-enabled chipset. However, 4Q revenue outlook is flat YoY and QoQ. The recovery period after the 2023 downturn seems to be ending.
The Mediatek conundrum is that the stock is expensive versus a slow 2025 outlook. Growth drivers exists but beyond 2025. In the short-term, the stock is unattractive.


Mediatek 3Q24 Inline, 4Q Guidance Slightly Weak, Flattish Revenue Outlook and the Stock Is Expensive

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

<ul>
<li>3Q24 Performance Signals Advanced Products Making Major Progress; 20% Topline Growth &amp; Improved China Market Conditions</li>
<li>Flagship Mobile Revenue Leading the Charge in China and Emerging Markets</li>
<li>ASIC and AI Accelerator Progress: Estimate 2025E/2026E Initial Mass Production; Maintain Structural Long Rating.</li>
</ul>


3Q24 Performance Signals Advanced Products Making Major Progress; 20% Topline Growth &amp; Improved China Market Conditions
Flagship Mobile Revenue Leading the Charge in China and Emerging Markets
ASIC and AI Accelerator Progress: Estimate 2025E/2026E Initial Mass Production; Maintain Structural Long Rating.


Mediatek's Advanced Product Strategy Showing Major Progress; Maintain Structural Long

Taiwan Tech Focused Senior Analyst

Patrick Liao

<ul>
<li>Rising D9400 demand will offset lower-end SP demand weakness in 4Q24. </li>
<li>MTK has over 30% market share of flagship SPs in China, so flagship sales growth in 2025 will be below 70%. </li>
<li>For China demand, it is better than expected compared to one year ago for SPs, TVs, modems, and connectivity.</li>
</ul>


Rising D9400 demand will offset lower-end SP demand weakness in 4Q24. 
MTK has over 30% market share of flagship SPs in China, so flagship sales growth in 2025 will be below 70%. 
For China demand, it is better than expected compared to one year ago for SPs, TVs, modems, and connectivity.


MediaTek (2454.TT): Weakness in the 4Q24 Is Offset by the Demand for D9400.

<ul>
<li>Smartphones units sold in 3Q24 increased by +4% YoY. That’s a slowdown from +7% YoY in 1H24.</li>
<li>Growth comes from low-price Emerging Markets demand. But the Premium segment sees increasing ASP with AI-enabled phones.  </li>
<li>Hence for Mediatek and Qualcomm, the investment thesis rests on increasing ASP as AI is propagating – not volume growth. MTK had a nice rally, time to take a breather. </li>
</ul>


Smartphones units sold in 3Q24 increased by +4% YoY. That’s a slowdown from +7% YoY in 1H24.
Growth comes from low-price Emerging Markets demand. But the Premium segment sees increasing ASP with AI-enabled phones.  
Hence for Mediatek and Qualcomm, the investment thesis rests on increasing ASP as AI is propagating – not volume growth. MTK had a nice rally, time to take a breather. 


Smartphone Growth Is Slowing Down to +4% YoY in 3Q. Mediatek Had a Good Rally, Time to Take a Break

Taiwan

MediaTek Inc. is a fabless semiconductor company for wireless communications and digital multimedia solutions. The company provides SOC system solutions for wireless communications, high-definition TV, optical storage, DVD and Blu-ray products.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Mediatek Inc (2454 TT)

Tech Supply Chain Tracker (23-Nov-2024): IC design firms optimistic for 2025, cautious about 1Q25.

IC design firms optimistic for 2025, Taiwan monitors trade impact, JSR builds EUV plant, Japan cuts APB funding, MediaTek aims at Indian market,...

Tech Supply Chain Tracker

Mediatek 3Q24 Inline, 4Q Guidance Slightly Weak, Flattish Revenue Outlook and the Stock Is Expensive

Since 4Q23, revenues have been fattish in NT$. YoY revenue growth is the result of the 2023 downturn. Our main concern regarding Mediatek is high...

Nicolas Baratte

Mediatek's Advanced Product Strategy Showing Major Progress; Maintain Structural Long

Advanced products at 3Q24 are showing strong performance with 20% topline growth, driven by flagship mobile revenue in China and emerging markets.

Vincent Fernando, CFA

MediaTek (2454.TT): Weakness in the 4Q24 Is Offset by the Demand for D9400.

Strong demand for D9400 will help balance out the weaker demand for lower-end SPs in the 4Q24, with MTK holding a significant market share in...

Patrick Liao

Smartphone Growth Is Slowing Down to +4% YoY in 3Q. Mediatek Had a Good Rally, Time to Take a Break

Smartphone growth is slowing down but ASP are increasing for Mediatek with 5G AI-enabled phones. Mediatek has other drivers, AI chips and Auto GPU....

Nicolas Baratte

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Tech Supply Chain Tracker (23-Nov-2024): IC design firms optimistic for 2025, cautious about 1Q25.

IC design firms optimistic for 2025, Taiwan monitors trade impact, JSR builds EUV plant, Japan cuts APB funding, MediaTek aims at Indian market,...

Tech Supply Chain Tracker

Mediatek 3Q24 Inline, 4Q Guidance Slightly Weak, Flattish Revenue Outlook and the Stock Is Expensive

Since 4Q23, revenues have been fattish in NT$. YoY revenue growth is the result of the 2023 downturn. Our main concern regarding Mediatek is high...

Nicolas Baratte

Mediatek's Advanced Product Strategy Showing Major Progress; Maintain Structural Long

​Advanced products at 3Q24 are showing strong performance with 20% topline growth, driven by flagship mobile revenue in China and emerging markets.

Vincent Fernando, CFA

MediaTek (2454.TT): Weakness in the 4Q24 Is Offset by the Demand for D9400.

​Strong demand for D9400 will help balance out the weaker demand for lower-end SPs in the 4Q24, with MTK holding a significant market share in...

Patrick Liao

Smartphone Growth Is Slowing Down to +4% YoY in 3Q. Mediatek Had a Good Rally, Time to Take a Break

Smartphone growth is slowing down but ASP are increasing for Mediatek with 5G AI-enabled phones. Mediatek has other drivers, AI chips and Auto GPU....

Nicolas Baratte

Advanced products at 3Q24 are showing strong performance with 20% topline growth, driven by flagship mobile revenue in China and emerging markets.

Strong demand for D9400 will help balance out the weaker demand for lower-end SPs in the 4Q24, with MTK holding a significant market share in...