MediaTek expects to post a slight decrease in revenues for 2018, when combined shipments of its smartphone- and tablet-use SoCs will also register a mild drop. However, gross margin will improve in 2018 thanks to the roll-outs of new mobile SoC products and the company's efforts for diversification, said MediaTek CEO Rick Tsai during a July 31 investors meeting.

MediaTek gave a less-optimistic sales outlook for the third quarter, citing weaker-than-expected demand for smartphones. The company expects to post revenue growth of 3-11% sequentially in the third quarter, when shipments of its mobile SoC products will stay flat on quarter.

Nevertheless, shipments of MediaTek's non-mobile SoC offerings will enjoy a seasonal pick-up in the third quarter. The company has been enhancing its non-mobile chip segments to include solutions for IoT, power management IC, ASIC and automotive electronics applications.

MediaTek forecast revenues for the third quarter will be between NT$62.3 billion (US$2.04 billion) and NT$67.1 billion, with a gross margin of 36.7-39.7%. Combined shipments of its smartphone- and tablet-use SoCs will likely reach 100-110 million units.

MediaTek reported revenues for the second quarter of 2018 increased 21.8% sequentially and 4.1% on year to NT$60.48 billion, which also exceeded the company's guidance range from NT$55.6 billion to NT$59.6 billion. The company credited the sequential rise to a ramp-up of orders for new smartphones.

MediaTek's gross margin slipped 0.2pp on quarter to 38.2% in the second quarter, due to product mix changes. Gross margin was up 3.2pp compared to the same period in 2017.

MediaTek generated operating profits of NT$4.09 billion in the second quarter of 2018, with operating margin reaching 6.8% compared with 3.9% in the prior quarter and 4.1% a year earlier. Net profits surged 182% on quarter to nearly NT$7.5 billion, thanks largely to gains incurred by disposal of investments, with EPS coming to NT$4.75.