MediaTek suffers Q4 profit drop as competition bites - Mobile World Live

MediaTek suffers Q4 profit drop as competition bites

01 FEB 2016

MediaTek saw its Q4 profit halved, which it said was “mainly due to smartphone market competition”.

The company has seen its margins pressured as the volume of 4G products increased, although in a conference call it was noted that the impact of this is slowing.

David Ku, CFO, said the company is looking to significantly increase the portion of its chip volume that comes from its Helio higher-tier line, from less than 10 per cent to 20 per cent.

He also said MediaTek is looking to secure a greater share of the 4G market, growing faster than the market as a whole.

The company reported a net profit of TWD4.2 billion ($125 million), down 59.8 per cent year-on-year, on revenue of TWD61.7 billion, up 11.3 per cent. The increase in revenue was attributed to revenue recognition following its buy of power management technology company Richtek and a higher mix of high-end consumer electronics.

Operating expenses increased 19.9 per cent to TWD20 billion, which was attributed to Richtek operating expenses recognition and “higher expenses associated with talent and technology investments”.

For the full year, the company reported a net profit of TWD25.8 billion, down 44.5 per cent, on revenue of TWD213.3 billion, essentially flat year-on-year.

And in 2016, it expects growth to be powered by its smartphone and IoT efforts, while its home entertainment activities will see “steady” progress.

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