Seasonality will likely drag down MediaTek's revenues in the fourth quarter of 2016, while the company's gross margin remains under downward pressure, according to a recent Chinese-language Commercial Times report.

Strong orders from China-based Oppo and Vivo buoyed shipments of MediaTek's mid-range chips including the MT6750 and MT6755, and boosted the company's revenues during the first three quarters of 2016, the report indicated. However, a slowdown in orders from China will result in lower revenues at the chip firm, the report said.

In addition, with Oppo placing chip orders for its R9 and probably N5-series with Qualcomm, MediaTek will be negatively affected by a cutback in orders from Oppo, the report noted.

MediaTek has responded saying it was not the source of the report.

A report by Taiwan's Central News Agency (CNA) quoted market watchers as saying Oppo is already MediaTek's largest client and will contribute about 20% of MediaTek's total revenues generated from the handset sector in 2016. However, the chip firm will obtain less than 50% of the overall chip orders for Oppo's handsets in the first half of 2017, down from more than 70% in 2016.

MediaTek's share price on the Taiwan Stock Exchange (TSE) fell NT$3.50 or 1.4% on October 6, closing at NT$243.50 (US$7.76).