Sometimes a crisis really is an opportunity. Just ask Taiwan chip champion Mediatek.

It has ridden the pandemic to achieve record results and become the leader in smartphone chips.

In the last two years it has doubled revenue and increased earnings nearly five times while its stock price has risen threefold.

Figure 1: More than 2 billion electronic devices sold last year – from smartphones and tablets to smart TVs and routers – carried Mediatek components.
(Source: Ascannio/Alamy Stock Photo)

Last month it handed down another blockbuster result, with quarterly sales up 34% year-on-year to NT$129 billion (US$4.63 billion) and full-year revenue rising 53% to NT$493 billion. Quarterly net income doubled and full-year earnings soared 170%.

The Taipei-listed firm has benefited from the supply chain crunch that has driven up prices as well as the pandemic-induced growth in demand for smartphones and other devices.

It has enjoyed a further boost from Huawei's handset market exit, with China-based clients such as Vivo, Oppo and Xiaomi rushing in to fill the breach.

The company has overtaken Qualcomm to lead the smartphone SOC market, with a 43% market share in Q3, thanks to its competitive 5G products and the high demand for 4G SoCs, according to Counterpoint Research.

More than 2 billion electronic devices sold last year – from smartphones and tablets to smart TVs and routers – carried Mediatek components, the company said.

'More aggressive' growth plans

Now it has restructured itself into three units: smartphone, edge platforms, which covers devices, and its new power IC unit that is targeting industry verticals.

CEO Rick Tsai told analysts as a result the company expects the total addressable market to grow to $140 billion in 2024 up from $80 billion in 2021, with forecast CAGR revenue of "mid-teen percent for the next three years."

He said in Q4 the mobile phone unit accounted for roughly 52% of revenue, smart edge 41% and power around 7%.

In 2022, the company expects 5G to keep driving the smartphone market, and will likely account for more than half of all device sales worldwide, he said. Mediatek aimed to maintain its China 5G market share, but expected 5G shipments outside China would double in 2022.

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Tsai highlighted Mediatek's high-end Dimensity 9000 SOC, which has been adopted by most major China brands and is due to launch in March, and the company's first millimeter wave chipset, which will go into mass production in the second half of the year.

Tsai also held out the possibility of pursuing acquisitions to drive growth, noting that Mediatek's greater scale allowed it to get "more aggressive.... we are looking at all options." "With our business realignment to invest heavily in computing, connectivity and smart edge platforms, we believe we are on the right track to capture future growth opportunities," he said.

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— Robert Clark, contributing editor, special to Light Reading