Sales of low-cost smartphones in China have been weaker than expected since October, which has had a negative impact on MediaTek's revenues, which are generated mostly from the sale of its mobile processors shipped to China's brand and white-box handset companies, according to industry sources.

MediaTek has seen several clients turn cautious about their procurement toward the end of the year, the sources observed. Meanwhile, with the availability of MediaTek's quad-core solutions, several China-based smartphone vendors are in the process of transitioning from old to new products which has caused a slowdown in their orders, the sources said.

Due to a slowdown in demand coming from China's smartphone sector, consolidated sales at MediaTek in the fourth quarter are likely to miss the company's guidance range of NT$28.9 billion (US$995 million) and NT$30.9 billion, the sources indicated.

In response, MediaTek reiterated the sales guidance given previously for the fourth quarter.

MediaTek reported NT$29.47 billion in third-quarter consolidated sales, up 25.7% sequentially, driven by growing shipments of its smartphone solutions to China.