MediaTek's Mixed Tariff Impact and AI-focused Growth Strategy
Anticipated Decrease in Smartphone Demand According to MediaTek Predictions
In a volatile consumer electronics market, MediaTek CEO Rick Tsai announced that the company expects a decrease in revenue this quarter by 4 percent at most. The expected revenue range is between NT$147.2 billion and NT$159.4 billion (US$4.6 billion - US$4.98 billion), compared to NT$153.31 billion last quarter [1].
MediaTek forecasts a gross margin of 46 to 49 percent for this quarter, a slight decrease from the 48.1 percent gross margin last quarter [1]. Despite market uncertainties, MediaTek does not anticipate any material order changes from customers due to the long production cycle time [2].
Tariff impacts remain limited for MediaTek, as the US market only accounts for 10 percent of its overall revenue [3]. The company has not provided its full-year growth projection for 2025 due to the potential impact from US tariffs and trade policies [1][3].
Short-term cautiousness notwithstanding, MediaTek continues to focus on the long-term growth prospects of AI. In collaboration with NVIDIA, MediaTek aims to generate over $1 billion in revenue from AI-specific integrated circuits (ASICs) by 2026 [3][5].
The company's media processing unit (MPU) saw rapid growth in Q1 2025, with revenue surging by 32% YoY, driven by edge devices and smart-home demand [5]. Similarly, premium smartphone demand has contributed to a rise in MediaTek's Q1 2025 revenue, which increased by 14.9% YoY to NT$153.3 billion ($4.6 billion) [4][5].
MediaTek also expressed optimism about the prospects of its Dimensity Auto platform in the automotive market and its AIoT segment [5]. With these initiatives, MediaTek aims to offset potential tariff risks and achieve "positive 2025" results, despite lingering concerns about slowing smartphone demand and global trade policy shifts [5].
In summary, MediaTek faces mixed impacts from potential US tariffs, balancing short-term caution with long-term optimism driven by AI demand. The company's ability to offset tariff risks hinges on its execution in AI and automotive markets, which are less susceptible to US trade actions.
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- Despite the potential US tariff risks, Tsai remains optimistic about MediaTek's long-term growth prospects, particularly in the AI and automotive markets.
- In collaboration with NVIDIA, MediaTek aims to generate over $1 billion in revenue from AI-specific integrated circuits (ASICs) by 2026, as part of its emphasis on technology innovation.
- The company's focus on AI and the automotive market is an essential part of its strategy to offset potential tariff risks and achieve positive results in 2025.
