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MediaTek: We will not be deterred

MediaTek, which is locked in an increasingly contentious battle with rival Qualcomm, this week raised its 2021 annual revenue growth target from around 40% to above 45%.

Mike Dano

July 27, 2021

3 Min Read
MediaTek: We will not be deterred

Taiwan's MediaTek – recently the world's largest supplier of chips for smartphones – isn't blinking.

The company is preparing to challenge market heavyweight Qualcomm on the vendor's home turf amid a global chipset shortage that has upended the worldwide electronics industry. But MediaTek isn't discouraged; the company this week raised its 2021 annual revenue growth target from around 40% to "a level above 45%," CEO Rick Tsai said during the company's quarterly conference call, according to a Seeking Alpha transcript.

But what about Qualcomm? Analysts on the call questioned whether MediaTek is worried about the San Diego vendor's plans to retake market share in the second half of 2021.

"We should be maintaining the market share fairly well," answered CFO David Ku. And what of the global chipset shortage? The one that has affected everything from automobile launches to telecom network buildouts?

"Overall we do believe that supply tightness is probably lasting for quite some time, maybe at least for one to two years," noted Ku, echoing recent comments recently Intel's CEO. But MediaTek's Tsai added that the situation "should not be seen as concern for our business outlook."

Overall, MediaTek reported second quarter revenues up 16.3% from the previous quarter and an operating income up 42.8% from the previous quarter.

MediaTek sells chips for a variety of electronics, but mobile phones account for 57% of its revenues. The company recently grew into the world's largest vendor of chips for phones, but much of that was due to its sales of products for low-end devices. Starting in 2019, MediaTek began chasing the high-end phone market in a direct attack on Qualcomm's core business.

Company officials promised to continue to stamp out share in the high-end, 5G phone market, including with the biggest smartphone vendors in the world – though they declined to name any.

MediaTek is also planning to launch a product for millimeter wave (mmWave) 5G networks in the second half of this year. That too would widen its assault on Qualcomm, which managed to capture a substantial lead in the mmWave 5G space with a range of products for such networks.

But that's not MediaTek's only vector for growth. For example, the company on Tuesday announced new chips for 5G tablets – dubbed Kompanio – in an attempt to expand its addressable market beyond phones.

"There is a growing demand right now for personal computing devices designed for both remote work and multimedia entertainment," said PC Tseng, GM of MediaTek's Intelligent Multimedia Business Unit, in a release. "That's why MediaTek is focused on integrating the latest advancements in computing, communication, multimedia, AI, gaming and wireless connectivity into the Kompanio series."

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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