MediaTek’s Q4 revenue and net profit increased year-on-year thanks to the recovery of smartphones
MediaTek's financial report shows that the company's consolidated revenue in 2023 will be NT$433.446 billion (US$13.825 billion, 99.693 billion yuan), a 21% decrease from 2022.
At a press conference, Vice Director and CEO Cai Lixing said that the market share and performance of flagship mobile phone chips will continue to rise this year, and AI will be further introduced into terminal devices such as automobiles. He is optimistic that 2024 will be the company's next growth stage. Initially, revenue will have strong double-digit growth this year.
Cai Lixing said that the revenue of the mobile phone business in the fourth quarter increased by 53% compared with the previous quarter, accounting for 64% of the company's revenue. The strong quarterly growth comes from 5G and 4G demand, as well as the successful ramp-up of flagship chip Dimensity 9300. For 2024, global smartphone shipments are expected to grow by a low-single-digit percentage to approximately 1.2 billion units, while 5G penetration will increase from 57%-59% in 2023 to 61%-63%.
Cai Lixing pointed out that MediaTek has actively deployed in the fields of flagship mobile phone chips, wireless networking, enterprise ASIC, automotive electronics and Arm architecture computing. It will continue to promote new projects this year, and some of them will be mass-produced by the end of this year. In the first quarter of 2024, mobile phone revenue is expected to decline slightly from the previous quarter following strong replenishment demand in the fourth quarter.
Regarding global mobile phone shipments, MediaTek predicts that global smartphone shipments will grow by 1-3% to approximately 1.2 billion units, and 5G penetration will increase from 57%-59% last year to 61%-63%, which is optimistic. Generative AI continues to drive demand for mobile phone upgrades, while driving the growth of the overall flagship and high-end mobile phone markets, becoming an important driving force this year.
Cai Lixing is optimistic that AI will require more powerful computing power and faster transmission to support it. MediaTek sees mid- to long-term growth opportunities in both edge computing and cloud computing.
In terms of edge computing, MediaTek has a wide range of edge AI products, including smartphones, computing devices, robots, automobiles and other fields. It is expected that the market demand for edge computing capabilities will grow rapidly to meet consumers' better privacy protection and lower costs. latency and lower cost.
In terms of cloud computing, MediaTek has strategically deployed 112G and 224G SerDes IP, which are crucial for high-speed transmission in data centers and provide strong integration capabilities in advanced process technology, chiplet architecture design and advanced packaging. Power management IC solutions can also meet the higher computing and storage-related power management needs of data centers.
Overall, in the first quarter of 2024, growth from TVs, tablets and broadband is expected to offset seasonal declines in other consumer electronics products, and smart device platform revenue is expected to be approximately the same as the previous quarter. Next is power management IC, whose revenue in the fourth quarter increased by 1% compared with the previous quarter and accounted for 6% of the company's revenue. Data center power management IC revenue grew strongly in the fourth quarter, while consumer electronics was flat. In 2024, we will continue to expand in new areas such as automotive and data centers to drive business growth. As for the first quarter of 2024, power management IC revenue is expected to decline from the previous quarter due to seasonality and the transitional stage of some products.
Looking forward to the first quarter, MediaTek expects first-quarter revenue to be between 121.8 billion and 129.6 billion based on the U.S. dollar to Taiwan dollar exchange rate of 1 to 31.2, which is about the same as the previous quarter or down 6%, and an increase of 27% from the same period last year to 35. %. The operating gross profit margin is estimated to be 47.0% ± 1.5%, and the expense ratio is estimated to be 28% ± 2%. In terms of gross profit margin, with our continued efforts on product and customer mix, the gross profit margin in 2024 is expected to remain within the range of the first quarter gross profit margin operating target.
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