MediaTek to grow on AI, auto chips

LOOKING AHEAD:
AI-powered cloud computing devices and automotive applications would be a ‘natural shift’ for MediaTek, given its portfolio and products, its CEO said

• By Lisa Wang / Staff Reporter

MediaTek Inc (聯發科), the world’s biggest mobile phone chip supplier, yesterday said application-specific integrated circuits (ASIC) for artificial intelligence (AI)-enabled data centers and auto chips would be its dual revenue growth engines in next decade.

The Hsinchu-based chip designer made the remarks in response to a shareholder’s question about the company’s next growth drivers, given that the smartphone market is reaching a plateau.

“5G, AI and automotive are the areas with potential growth in next 10 years. AI covers a wide range of applications, from cloud to edge devices,” company chairman Tsai Ming-kai (蔡明介) said during an annual general meeting yesterday.

“MediaTek has been developing products for mobile phones and various applications mostly for edge devices,” Tsai said.

It would be natural for the firm to shift to AI-powered cloud computing devices and automotive applications, given its rich intellectual property portfolios, he said.

“The revenue contribution is still small. We are making smooth progress,” Tsai said.

Mobile phone chips were the biggest revenue contributor in the last quarter, making up 60 percent of the company’s total revenue.

MediaTek earlier this year introduced its first automotive chip portfolio, dubbed Dimensity Auto Cockpit, which runs large language models, allowing vehicles to support chatbots, rich content delivery to multiple displays, driver alertness detection, and other AI-based safety and entertainment applications.

The Dimensity Auto Cockpit chipsets integrate a state-of-the-art Armv9-A system, Nvidia’s next-generation deep learning accelerator with generative AI capabilities, as well as Nvidia RTX graphics, MediaTek said.

Aside from the automotive segment, MediaTek has been heavily investing in the development of ASIC and Arm computing, company CEO Rick Tsai (蔡力行) told shareholders.

They have “high confidence” that those new technologies would yield plenty of growth in the next three to five years, he said.

The company also said it wanted to tap into the rapidly-growing market of AI ASIC accelerators for data centers, which is estimated to grow from US$12 billion this year to US$40 billion by 2028.

MediaTek is vying for a 10 percent market share, it told investors last month.

It also aims to continue growing revenue at an annual pace of 15 percent this year, on the back of a recovery from an inventory correction cycle post-COVID-19 pandemic and strong uptake of its flagship smartphone chips.

Customers started rebuilding smartphone chip inventory early this year, after reducing inventory to a very low level at the end of last year, Tsai said.

However, customers’ restocking demand has come to an end this quarter, he said, adding that their inventory has reached a “balance.”

MediaTek’s shareholders yesterday approved the distribution of a cash dividend of NT$26.4 per share, based on the first half of last year’s earnings of NT$20.71 per share, and another cash dividend of NT$30.4 a share for the second half, based on its EPS of NT$27.79.

Shareholders also approved the board director nominations of Tsai Ming-kai, Rick Tsai and chief operating officer Joe Chen (陳冠州).

A majority of the nominees are existing directors, except Chang Yao-wen (張耀文), dean of the College of Electrical Engineering and Computer Science at National Taiwan University.

Chang replaced Tang Ming-je (湯明哲) as an independent director.