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MediaTek's CEO increasingly cautious about smartphone market in coming year

MediaTek have been reported as making good, if flat, profits this year. (Source: MediaTek)
MediaTek have been reported as making good, if flat, profits this year. (Source: MediaTek)
The processor supplier MediaTek have posted an increase in second-quarter profits; however, its sales may have been unchanged compared to last quarter. Accordingly, the company's CEO has predicted a slight downturn in MediaTek's main market for the rest of 2018.

MediaTek supplies processors for numerous smartphones, smartwatches and tablets. The Taiwanese company are strongly linked to the low-end, indie and/or Chinese-tech segment of these markets. A report posted on August 1, 2018 by the Taiwanese news site Economic Daily News has claimed that the company has posted net second-quarter profits of just under 181% compared to the previous quarter. MediaTek's revenue reached approximately 8.9 US billion dollars as a result, and its share price closed at just over US$37 on the day these results were posted (July 31, 2018). 

On the other hand, the report also noted that the company's corrected stock price was also at an all-year low. In addition, its costs (31.9% of all revenue) had not changed significantly compared to last quarter. Similarly, its shipments were not significantly different from those in the same period. The MediaTek overall revenue forecast also increased by only 8%, which did not exceed the market's expectations.

These results may have been what caused MediaTek's CEO, Cai Lixing, to predict a slight downturn in the smartphone market for the immediate future. He estimated that its year-on-year growth will be only 1%, and that his own company's gross profit margin will fall by 1.5% (to 38.2%). This slightly negative outlook may be influenced by reduced consumer confidence in this sector. The Economic Daily News report also suggested that last year's market was somewhat sluggish, and that this has had a lingering effect on its performance in 2017. On the other hand, Cai Lixing also indicated that certain product lines (e.g. "mature products") had the potential to buck this trend somewhat. 

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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2018 08 > MediaTek's CEO increasingly cautious about smartphone market in coming year
Deirdre O Donnell, 2018-08- 4 (Update: 2018-08- 4)