Taiwan-based first-tier IC-design houses MediaTek and Novatek Microelectronics are set to sustain continued revenue growths in the third quarter of 2018, powered by the release of new chips, according to industry sources.
The robust revenue forecasts for MediaTek and Novatek come at a time when demand for smartphone chipset solutions is expected to remain lackluster in the third quarter despite vendors’ efforts to bring out new models with AI-enabled functionality, said the sources.
The sources continued that most IC-design houses are cautious about inventory levels at the handset supply chains in Taiwan and China as smartphone shipments from Huawei, Oppo, Vivo and Xiaomi have not come as strong as expected so far in 2018.
However, the sources pointed out that MediaTek is expected to continue to ramp up market share for its Helio P60 and P22 SoCs in the second half of 2018.
Shipments of the Helio P60 chips will move up gradually in the second half in line with the roll-outs of new models by clients, while a number of China-based smartphone vendors have decided to adopt the Helio P22 for smartphones targeting emerging markets, said the sources.
The kick-off of volume production of the Helio P22 will help boost MediaTek’s revenues, gross margin and earnings in the latter half of 2018, added the sources.
MediaTek forecast earlier that its revenues will grow 12-20% on quarter to NT$55.6-59.6 billion in the second quarter and expand another 10% sequentially in the third quarter.
Meanwhile, Novatek has been benefitting from the release of its new TDDI (touch and display driver integration) chips as well as driver ICs for OLED panels.
Demand for TDDI chips will remain robust in the third quarter due to the growing adoption of all-screen panels by smartphone vendors, said the sources.
Novatek has managed to secure enough capacity from its foundry partners to boost its TDDI chip shipments, the sources said, noting that both TDDI and OLED driver ICs yield higher gross margins.
Novatek saw its revenues rise 9.3% sequentially to hit a 40-month high of NT$4.57 billion (US$149.51 million) in May. The company forecast earlier that its revenues will reach between NT$12.5 billion and NT$12.9 billion in the second quarter, up 19-23% sequentially.
Another news about Mediatek. Mediatek’s 5G 3GPP modem, Helio M70, claims 5Gbps speeds which sets a bar for Intel to reach if it is to retain its slot as the second source modem supplier to Apple.
According to Bloomberg, Apple is looking to drop Intel. The likely reason for that is Intel’s relatively slow modems compared to Qualcomm’s.
The Helio M70 is to be made on TSMC’s 7nm line and is due to ship next year.
Announcing the chip six months early is an indication that Mediatek has the Apple slot in its sights.
It is also a warning shot across the bows of Qualcomm in its long-running dispute with Apple. Apple is said to be aiming to reduce the proportion of Qualcomm modems it uses to 30%.
