Demand for MediaTek Products Still Quite Good in India

MediaTek, however, scrapped its numbers for second and third quarters due to it being “severe” for 4G phone demand

Highlights
  • MediaTek said that the demand for its products are “still quite good” in India
  • MediaTek could have “significant share” in the 5G market as the company has “quite a few” products in its pipeline
  • The COVID-19 lockdown impact will probably be greater in India than Southeast Asia

MediaTek in its earnings call on Tuesday said that the demand for its products are “still quite good” in India and other emerging markets. The company engaged in the semiconductor business earlier on Tuesday announced its first quarter results with MediaTek reporting an 5.9% decrease in revenues as compared to its previous quarter. However, its first quarter revenue of NT$60,863 million is 15.4% up on a year-over-year (YoY) basis. MediaTek said that the quarter-over-quarter decrease was because of the “lower seasonal demand for consumer electronics” while the YoY rise was due to the “smartphone market share gain.”

Weakness in Mark Demand, MediaTek 4G Shipments to Remain Flat

Rick Tsai, chief executive officer of MediaTek said in the earnings call that the weakness in market demand in India and other emerging countries will have an impact on the demand of 4G products.

“Of course what’s happening in India and other emerging markets, are having impact on the demand of the 4G product,” Tsai said in the earnings call. “However, our demand I would say it’s still quite good.”

Crucially, Tsai said that the MediaTek 4G shipments in the upcoming quarters will be “somewhat flat” as compared to the previous year.

“We believe our 4G shipment will be somewhat flat compared to last year,” Tsai said. “Considering the severity of the end demand, I think many different markets, I think the company has done really a good job in the 4G segment.”

Further, Tsai said that MediaTek could have “significant share” in the 5G market as the company has “quite a few” products in its roadmap scheduled to be released in the second and third quarter.

COVID-19 Lockdown Impact More in India Than Southeast Asia

With India and several countries in the world enforcing lockdown due to COVID-19 situation in late March, Tsai said that the impact on the market demand will be felt more in India.

“If you look at India and the Southeast Asia, I think the market impact can be quite different with India and the Southeast Asia,” Tsai said. “We believe the India impact probably greater compared to Southeast Asia. So again, if we combine all those things together, 4G end market demand is going to be down quite a bit.”

While Tsai believes that the China market can almost grow back to its 2019 second quarter levels, MediaTek has scrapped its second and third quarter outlook numbers for India and other emerging markets.

“We have scrapped the numbers in our third quarter, which – second quarter and third quarter 4G demand in the emerging markets, including India,” Tsai said.  “I think these two quarters probably are the most severe quarters for 4G phone demand.”

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Born in India, Yogesh loves to travel and has lived in multiple countries including New Zealand and Canada. His bylines can be found on various newspapers and blogs throughout the world, including Vancouver Sun, Surrey Now-Leader, Daily Hive , Investing News Network and Rach F1.

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