Fabless IC firm MediaTek has announced NT$7.81 billion (US$270 million) in March 2011 revenues. The figure comes below market watcher estimates of over NT$8 billion. MediaTek's revenues for the first quarter of 2011 decreased 12.4% sequentially to NT$19.86 billion, meeting the lower end of the company's NT$19.5-21 billion guidance.
MediaTek's March shipments of handset solutions recovered at more than 90% of the monthly high levels reached during the first half of 2010. However, due to downward price adjustments made later in 2010, MediaTek saw March revenues at only 60-70% of the previous high levels, according to market observers.
Smartphone chips, which MediaTek is seeing as a key driver for its future growth, may not bring in a solid contribution to its revenue and gross margin performance until the third quarter, the observers said. With MediaTek's focus on China's white-box handset suppliers, whether or not the company is allowed to expand its business into the smartphone sector as a new growth engine will depend on the maturity of the industry ecosystem in China.
For example, MediaTek's first smartphone solution, which the company introduced in 2009, was unable to see growing adoption due to limited availability of smartphones from China's white-box companies, the observers explained.
MediaTek president Hsieh Chin-chiang recently said that the company expects to generate a substantial rebound in revenues and profits in the third quarter of 2011. The remark echoed the observers' comments that MediaTek's performance should remain dull in the second quarter.
MediaTek reported a particularly weak fourth-quarter 2010, when consolidated revenues declined 19.5% sequentially to NT$22.68 billion. Gross margin slid to 49.2% in the fourth quarter from 52.2% in the third and 58.7% in fourth-quarter 2009.