Although MediaTek expects to see its revenues grow 10% sequentially to NT$11 billion (US$350.26 million) in September and its order visibility for fourth- quarter 2010 is also sound, there are growing concerns that the handset solution giant may be unable to improve its gross margin and profitability in the short-term as the company has so far failed to ramp up its shipments of 3G (WCDMA and TD-SCDMA) handset chipsets, according to industry sources.
MediaTek's third-quarter revenues are expected to top NT$29-30 billion, down less than 3% sequentially compared to a sequential decline of 8-15% the company projected previously.
For the fourth quarter, revenues may stand at the same level as that recorded in the third quarter as demand for handset solutions from China and other emerging markets will help offset the impact of slow sales to the PC and LCD TV sectors, the sources noted.
However, declining ASPs of MediaTek's solutions and the slow shipments of 3G chipsets will work to slow revenue growth momentum and further undermine its gross margin and profitability for the first quarter of 2011, the sources commented.