IC Design FactoryUNIDENTIFIED MALE (2454-TW) held a press conference today and announced its first quarter financial results, net income after tax of NT$16.874 billion and net income per share of NT$10.64, both of which are at 9-quarter lows. Looking ahead, CEO Li-Hsing Tsai said that the second-quarter revenue is comparable to that of the previous quarter, and due to the limited visibility, he does not provide a full-year outlook, and he also predicted that there will be only 1.1 billion cell phones left in the world this year.

Q1 Earnings in line with expectations, net income at 9-quarter lows

MediaTek's first-quarter revenue fell below NT$100 billion, or about NT$95.652 billion, with a gross margin of 48%, a one-and-a-half-year low, and net income of NT$16.874 billion, a quarterly decrease of 8.7% and an annual decrease of 49.3%, and net income per share of NT$10.64, both hitting a new low in the nine-quarter period.

Q2 Revenue Flat on Low Demand Expectations

Tsai Li-Hsing admitted that due to the lower-than-expected demand for consumer electronics such as cell phones, the median revenue for the second quarter is about the same as the previous quarter. Based on the US dollar to NT dollar exchange rate of 1 to 30.3, the revenue for the second quarter is about NT$91.8-99.5 billion, a quarterly decrease of 4% to a quarterly increase of 4%, and a yearly decrease of 36-41%, and it also adjusted downward its gross profit margin to a range of 45.5-48.5%.

Visibility still limited No full-year outlook

Li-Hsing Tsai pointed out that, looking ahead to the second half of the year, it is difficult to provide clear figures at this stage as visibility of demand in the end market is still limited, but revenue is expected to improve in the second half of the year, emphasizing that MediaTek is still able to capitalize on market opportunities when demand improves based on its strong technology and product portfolio.

Ji-Pu Viewpoint:

In the first quarterly financial report, MediaTek faced the difficulties of lower gross margin and lower net income after tax, mainly due to the impact of inventory and price cuts. In addition, as the industry continues to adjust inventory and the 5G upgrade wave has entered a plateau period, the price competition with rival Qualcomm has become more and more intense, further compressing MediaTek's profit margins. Nevertheless, MediaTek has demonstrated strong growth in its existing automotive products over the past few years. Through the Dimensity Auto platform, MediaTek has stepped up its automotive electronics deployment and investment, while working closely with industry partners to accelerate its future growth.