MediaTek Product Request Still Good in India

In its earnings call on Tuesday MediaTek said demand for its products in India and other emerging markets is “currently very strong.” Earlier on Tuesday, the company engaged in the semiconductor industry announced its first quarter results with MediaTek posting a 5.9 per cent decrease in sales compared to the previous quarter. However, on a year-over-year (YoY) basis, its first quarter revenue of NT$60,863 million is 15.4 per cent up. MediaTek said the quarter-over-quarter decline was due to “lower seasonal demand for consumer electronics” while the YoY increase was attributed to “market share gain for smartphones.”

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

MediaTek chief executive Rick Tsai said in the earnings call that the slowdown in market demand in India and other emerging countries would impact the demand for 4 G devices.

“What’s happening in India and other emerging markets, of course, has an impact on 4G product demand,” Tsai said in the call for earnings. “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 agree that our 4G shipment would be a little flat compared with last year,” Tsai said. “Given the magnitude of the end demand, I think several different markets, I think the company has done a very good job in the 4G business.” However, Tsai said that MediaTek will have “important share” in the 5G industry, as the company has “quite a few” devices in its roadmap scheduled for release in the second and third quarters.

COVID-19 Lockdown Impact More in India Than Southeast Asia

In late March, with India and many countries worldwide implementing the lockdown due to the COVID-19 situation, Tsai said the effect on consumer demand in India would be felt more.

“When you look at India and Southeast Asia, I believe the business interaction with India and Southeast Asia can be very different,” Tsai said. “We believe the effect on India is possibly greater than on Southeast Asia. So again, if we combine all these things together, the demand on the 4G end-market will be quite down a bit.

Although Tsai believes the China market will almost regain its second-quarter point in 2019, MediaTek has scrapped its second- and third-quarter outlook numbers for India and other emerging markets.

“In our third quarter we scrapped the numbers that – second quarter and third quarter 4G demand in the developing markets, including India,” Tsai said. “I believe these two quarters are potentially the most serious quarters for the market for 4G services.”

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