Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

<ul>
<li>MediaTek expects a reduced DOI level in 2024F while maintaining operating expenses and pricing discipline in 2023.</li>
<li>The upgrade cycle has begun for devices equipped with AI functions. The Dimensity 9300 is just the first edge AI product for smartphones. </li>
<li>MediaTek does not predict a significant increase in demand and expects a steady demand for smartphones. </li>
</ul>


MediaTek expects a reduced DOI level in 2024F while maintaining operating expenses and pricing discipline in 2023.
The upgrade cycle has begun for devices equipped with AI functions. The Dimensity 9300 is just the first edge AI product for smartphones. 
MediaTek does not predict a significant increase in demand and expects a steady demand for smartphones. 


MediaTek (2454.TT): 2024F Indicating a Complete Recovery from the Previous Downturn Situation.

<ul>
<li>3Q24 Sales: NT$123.5-132.4 billion, down 3% to up 4% QoQ, up 12-24% YoY. 4Q24 is expected to be a slower quarter based on current expectations.</li>
<li>Advanced 3nm technology can support SP, tablets, and other end devices. AI-powered functions like ARM-based CPU or EV will bear fruit in 2025.</li>
<li>The GPU has partnered with NVDA. Auto chips partnered with NVDA will be shipped out later in 2025. They will power MTK’s CPU and ISP in conjunction with NVDA’s GPU.</li>
</ul>


3Q24 Sales: NT$123.5-132.4 billion, down 3% to up 4% QoQ, up 12-24% YoY. 4Q24 is expected to be a slower quarter based on current expectations.
Advanced 3nm technology can support SP, tablets, and other end devices. AI-powered functions like ARM-based CPU or EV will bear fruit in 2025.
The GPU has partnered with NVDA. Auto chips partnered with NVDA will be shipped out later in 2025. They will power MTK’s CPU and ISP in conjunction with NVDA’s GPU.


MediaTek (2454.TT): There Appears to Be No Bright Spot in 2H24F.

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>Mediatek 2Q24 Earnings Beat Expectations; Strong Mid-Term Revenue Guidance Maintained</li>
<li>2Q24 Global Smartphone Market Witnessed Best Growth in Three Years</li>
<li>Repeats Strong Mid-Term Guidance; Continues to Signal Revenue Strength for 2025E &amp; 2026E. Maintain Structural Long Rating.</li>
</ul>


Mediatek 2Q24 Earnings Beat Expectations; Strong Mid-Term Revenue Guidance Maintained
2Q24 Global Smartphone Market Witnessed Best Growth in Three Years
Repeats Strong Mid-Term Guidance; Continues to Signal Revenue Strength for 2025E &amp; 2026E. Maintain Structural Long Rating.


Mediatek: AI Features Can Shorten Smartphone Replacement Cycle; New Verticals to Kick In 2H25E

<ul>
<li>The WiFi technology was dominated by <a href="https://www.smartkarma.com/entities/broadcom-corp-cl-a" target="_blank" data-smartkarma-citation="entities:999:1" rel="noopener">Broadcom Corp Cl A (BRCM US)</a>, but <a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a> has to break into the PC and smartphone markets in 2024F.</li>
<li>There are speculations that Apple might use MediaTek's WiFi 7 solution in 2024F or consider MediaTek as a potential chip provider.</li>
<li>MediaTek will be using 6nm technology for WiFi 7, replacing the current 28nm technology used for WiFi 6.</li>
</ul>


The WiFi technology was dominated by Broadcom Corp Cl A (BRCM US), but Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F.
There are speculations that Apple might use MediaTek's WiFi 7 solution in 2024F or consider MediaTek as a potential chip provider.
MediaTek will be using 6nm technology for WiFi 7, replacing the current 28nm technology used for WiFi 6.


MediaTek (2454.TT): The WiFi 7 Chip Competition Is Likely to Become Fierce in 2024.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a> is forecasted to experience slight growth in 3Q24 compared to 2Q24.  </li>
<li>
<a href="https://www.smartkarma.com/entities/qualcomm-inc" target="_blank" data-smartkarma-citation="entities:969:1" rel="noopener">Qualcomm Inc (QCOM US)</a> is expected to introduce AI PCs in 2024, while Mediatek Inc (2454 TT) scheduled for this product is anticipated to delivered in 2H25.  </li>
<li>The shipment forecast for the Dimensity 9400 is approximately 5 million sets in 2H24.</li>
</ul>



Mediatek Inc (2454 TT) is forecasted to experience slight growth in 3Q24 compared to 2Q24.  

Qualcomm Inc (QCOM US) is expected to introduce AI PCs in 2024, while Mediatek Inc (2454 TT) scheduled for this product is anticipated to delivered in 2H25.  
The shipment forecast for the Dimensity 9400 is approximately 5 million sets in 2H24.


MediaTek (2454.TT): 3Q24 Might Grow Slightly QoQ, While AI PCs Could Be Delivered in 2H25.

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.

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Mediatek Inc (2454 TT)

MediaTek (2454.TT): 2024F Indicating a Complete Recovery from the Previous Downturn Situation.

MediaTek anticipates lower DOI in 2024 but maintains pricing discipline and operating expenses. The D9300 marks the start of the AI upgrade cycle...

Patrick Liao

MediaTek (2454.TT): There Appears to Be No Bright Spot in 2H24F.

MTK's 3Q24 sales range from NT$123.5-132.4bn, -3%~+4% QoQ, with a 12-24% YoY increase. Advanced 3nm technology will support AI-powered functions...

Patrick Liao

Mediatek: AI Features Can Shorten Smartphone Replacement Cycle; New Verticals to Kick In 2H25E

Mediatek surpasses earnings expectations in 2Q24, maintains strong revenue guidance for the mid-term and signals continued revenue strength for...

Vincent Fernando, CFA

MediaTek (2454.TT): The WiFi 7 Chip Competition Is Likely to Become Fierce in 2024.

Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F. In 2024, MediaTek aims to potentially supplying WiFi 7 chips to...

Patrick Liao

MediaTek (2454.TT): 3Q24 Might Grow Slightly QoQ, While AI PCs Could Be Delivered in 2H25.

Mediatek Inc expected to see slight growth in 3Q24, while AI PCs are anticipated to delivered in 2H25. The shipment forecast for the Dimensity...

Patrick Liao

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MediaTek (2454.TT): 2024F Indicating a Complete Recovery from the Previous Downturn Situation.

​MediaTek anticipates lower DOI in 2024 but maintains pricing discipline and operating expenses. The D9300 marks the start of the AI upgrade cycle...

Patrick Liao

MediaTek (2454.TT): There Appears to Be No Bright Spot in 2H24F.

​MTK's 3Q24 sales range from NT$123.5-132.4bn, -3%~+4% QoQ, with a 12-24% YoY increase. Advanced 3nm technology will support AI-powered functions...

Patrick Liao

Mediatek: AI Features Can Shorten Smartphone Replacement Cycle; New Verticals to Kick In 2H25E

​Mediatek surpasses earnings expectations in 2Q24, maintains strong revenue guidance for the mid-term and signals continued revenue strength for...

Vincent Fernando, CFA

MediaTek (2454.TT): The WiFi 7 Chip Competition Is Likely to Become Fierce in 2024.

Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F. ​In 2024, MediaTek aims to potentially supplying WiFi 7 chips to...

Patrick Liao

MediaTek (2454.TT): 3Q24 Might Grow Slightly QoQ, While AI PCs Could Be Delivered in 2H25.

​Mediatek Inc expected to see slight growth in 3Q24, while AI PCs are anticipated to delivered in 2H25. The shipment forecast for the Dimensity...

Patrick Liao

MediaTek anticipates lower DOI in 2024 but maintains pricing discipline and operating expenses. The D9300 marks the start of the AI upgrade cycle...

MTK's 3Q24 sales range from NT$123.5-132.4bn, -3%~+4% QoQ, with a 12-24% YoY increase. Advanced 3nm technology will support AI-powered functions...

Mediatek surpasses earnings expectations in 2Q24, maintains strong revenue guidance for the mid-term and signals continued revenue strength for...

Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F. In 2024, MediaTek aims to potentially supplying WiFi 7 chips to...

Mediatek Inc expected to see slight growth in 3Q24, while AI PCs are anticipated to delivered in 2H25. The shipment forecast for the Dimensity...