Taiwanese semiconductor company MediaTek has reported its first year-on-year increases in both sales and profit in the past five quarters, attributed to a resurgence in smartphone-related demand. In the fourth quarter ended December, MediaTek achieved a consolidated net profit of 25.6 billion New Taiwan dollars ($820 million), marking a significant 38.8% increase from the same period a year earlier. This positive trend was also reflected in its net sales, which rose 19.7% to NT$129.5 billion.
During an earnings call, MediaTek CEO Rick Tsai credited the improvement primarily to unexpectedly strong smartphone demand. The company, known for its expertise in telecommunication semiconductors, counts prominent Chinese smartphone manufacturers like Xiaomi and Oppo among its major clients.
MediaTek’s financial performance had previously been affected by the downturn in China’s smartphone market. However, the year-end shopping season played a key role in the recent rebound.
Looking ahead to the first quarter of this year, MediaTek anticipates sales growth of 27-35% year-on-year, projecting revenues in the range of NT$121.8 billion to NT$129.6 billion. Despite the conclusion of the peak shopping season, Tsai expressed optimism about a more normalized inventory situation compared to the previous year.
While the company expects an increase in sales throughout 2024, MediaTek remains cautious in its forecasting due to significant geopolitical uncertainties. Tsai predicts that global smartphone shipments will see a modest growth of low-single digit percentages, reaching around 1.2 billion units this year.
A key driver for the smartphone market is the trend towards integrating generative artificial intelligence processing into the devices themselves, rather than relying solely on data centers. This shift is spurring demand for upgrades, particularly in the flagship and high-end smartphone segments.
Despite the positive outlook for 2024, MediaTek faced challenges in 2023, with sales declining 21% to NT$433.4 billion and net profit decreasing by 34.8% to NT$76.9 billion. This downturn marked the first drop in profit and sales for the company in five years. The recent financial results indicate a potential turnaround for MediaTek, as it adapts to evolving market demands and technological advancements in the smartphone industry.
