Intel to develop digital TV, WiFi chips for MediaTek

MediaTek Inc., Taiwan's largest IC designer, said Friday that it is working with American semiconductor giant Intel Corp. to develop chips for digital TVs and WiFi networks.

At an investor conference, MediaTek CEO Rick Tsai (???) said the two companies are already cooperating on the development of chips on mature technology, and MediaTek has now commissioned Intel to develop semiconductors for digital TVs and wireless access networks.

Tsai's statement came in the wake of an announcement by the two companies on July 25 that they had formed a partnership to manufacture chips on the Intel 16 process --- equivalent to the 22nm technology in the semiconductor industry.

The chips will be used for a range of smart edge devices, and the partnership is expected to span various technologies and applications in the long term, according to an Intel spokesperson.

On Friday, Tsai reiterated that the partnership with Intel will not change Mediatek's close business ties with Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, for the supply of advanced process nodes, including the latest 5nm chips for smartphones.

The news of the MediaTek-Intel partnership has given rise to some concerns that Taiwanese chip suppliers like United Microelectronics Corp. and Powerchip Semiconductor Manufacturing Co. will lose businesses to the American semiconductor giant.

Meanwhile, at MediaTek's investor conference, the company reported a record second-quarter net profit of NT$35.44 billion (US$1.18 billion), up 29.1 percent from a year earlier and 6.6 percent from the previous quarter.

Its second-quarter earnings per share was NT$22.39, compared with NT$21.02 in the first quarter and NT$17.44 in the same period of last year, while its consolidated sales rose to a new high of NT$155.73 billion, it reported.

However, its gross margin -- the difference between revenue and the cost of goods sold -- fell to 49.3 percent in the second quarter, down 1 percentage point from the first quarter, the company said, citing a change in its product mix.

In the first half of the year, MediaTek's net profit rose 29.4 percent from a year earlier, to about NT$68.70 billion, while its EPS was NT$43.4.

Looking ahead, Tsai said there are signs that MediaTek's clients are adjusting their inventories, which is likely to continue for another two to three quarters.

As a result, MediaTek's consolidated sales are expected to fall in the third quarter by 1-9 percent to NT$141.7 billion-NT$154.2 billion, while its gross margin is forecast at between 47.5 percent and 50.5 percent, Tsai said.

For the whole of 2022, the company's consolidated sales are likely to show growth of nearly 20 percent, he said, downgrading the company's earlier forecast of more than 20 percent, due to inventory adjustments in the market.

Source: Focus Taiwan News Channel