MediaTek has reported gross margin for the first quarter of 2016 fell further to 38.1% while consolidated revenues decreased 9.4% sequentially to NT$55.91 billion (US$1.73 billion).

Intense competition continued in the handset-IC market, putting MediaTek's gross margin under pressure. The company already saw its gross margin fall below 40% in the fourth quarter of 2015.

Nevertheless, MediaTek's gross margin for first-quarter 2016 came within the company's guidance range of 37-40%, with revenues also meeting its estimate of NT$52.5-57.4 billion.

MediaTek's revenues for first-quarter 2016 were 17.6% higher than a year earlier. The company credited the on-year increase to higher mix of high-end consumer electronics and Richtek revenue recognition. MediaTek's consolidated figures started including sales generated from analog IC firm Richtek Technology in October 2015.

MediaTek's gross margin slid to 38.1% in the first quarter of 2016 from 38.5% in the prior quarter and 47.3% a year ago, due mainly to smartphone market competition, the company indicated.

MediaTek generated net profits of NT$4.47 billion in the first quarter of 2016, up 7% on quarter but down 38.3% on year. EPS came to NT$2.79 compared with NT$2.83 in the fourth quarter of 2015 and NT$4.62 in first-quarter 2015.

MediaTek disclosed that inventory turnover came to 67 days at the end of first-quarter 2016, down from 70 days a quarter earlier and 92 days during the same period in 2015.