• MediaTek expects flat mobile revenue in Q2 2023 with growth in H2 2023 driven by an improvement in the elevated mobile inventory situation.
• The company believes it will gain SoC share in the US and Europe.
• MediaTek unveiled the 9200+ SoC. Key is the 5% - 12% performance boost. Built on 2^nd Gen TSMC 4nm plus optimized packaging, MediaTek expressed most OEMs will migrate to the 9200+ from the 9200 on future designs.
• Growth opportunities are present in entry 5G as many regions are now commencing 5G rollouts. Some aging SoCs will see price cuts, but pricing discipline is expected.
• MediaTek is focusing on the automotive, expects $200 million in automotive revenue in 2023 through design wins and products.
• The company believes it will gain SoC share in the US and Europe.

MediaTek held its annual analyst day in Austin, Texas on April 27^th. The general theme of the event was the company’s positive stance on the future, despite steep year-over-year declines in its quarterly results and diversification of its portfolio as well as regional revenue. In fact, the company has had zero layoffs during the recent turbulent times within the semiconductor industry. The company is rapidly transferring resources to automotive and AI computing areas.

Here are the key takeaways from the summit:

Mobile

• According to Counterpoint data, MediaTek was the biggest smartphone SoC player in terms of volume in 2022. MediaTek had 34% share in smartphone AP/SoC shipments in 2022 followed by Qualcomm with 29% share. Like other providers, there were tough decisions made related to shortages and allocation decisions. The company takes pride in the fact that it left no individual customer without allocations, though some received less than asked for in 2022.
• There were elevated inventories of both chipsets and finished goods exiting 2022. However, there have been improvements. Counterpoint Research data shows that sell-through had a sluggish start in Q1 2023, which did not help the situation. The China market remain well under pre-COVID-19 volumes.
• The company believes it will gain smartphone SoC share in the US and Europe in 2023.
• This will help offset the weaker sell-out expected in 2023 vs 2022. Conforming to Counterpoint’s take on the smartphone market, MediaTek recorded weak smartphone demand during Q1 2023 as consumers remained cautious. Mobile revenue is expected to be flat QoQ in Q2 2023 with an improvement in H2 2023.
• Though global mmWave rollouts have decelerated, the company has a high performing mmWave solution. The company is not seeing any new regions ‘leaning into’ mmWave. And, even within fixed wireless access (FWA), sub-6 spectrum is the workhorse. Nevertheless, MediaTek is prepared if things change.
• MediaTek unveiled the 9200+ SoC. Key is the 5% - 12% performance boost. Built on 2^nd Gen TSMC 4nm plus optimized packaging, MediaTek expressed most OEMs will migrate to the 9200+ from the 9200 on future designs.
• MediaTek believes the Dimensity 9000 series will help increase its share in the premium segment. vivo was the first to use MediaTek’s SoC with its X90 smartphone. Other significant design wins include the new OPPO Find N2 Flip and the Techno PHANTOM V Fold, powered by the Dimensity 9200+. To gain share in new price tiers, it will take three to four generations or more before we see how disruptive MediaTek’s flagship series will be.
• MediaTek said that it is the leader in mobile hotspots and FWA hardware and has early satellite link hardware in the market.

Source: MediaTek

• There are many areas within the premium segment that have had significant spec improvements. Gaming continues to drive specs with ray tracing, better power management, frame rate management and improved thermals. MediaTek is bringing 4x carrier aggregation to the market. For regions with fragmented 5G spectrum (such as the US), this is important for mobile operators.
• As many regions are at the beginning of 5G rollouts, there likely will be an opportunity for growth at entry 5G. Except for some aging SoCs, pricing discipline has remained intact which is particularly important for MediaTek.
• Connected PC continues to be a challenging segment. Like other players in the ecosystem, MediaTek is not giving up. With improved performance and better mobile service terms, things could change in the medium term. The key advantages (multi-day battery life, superior security to public Wi-Fi, fast bootup) still need to be campaigned to consumers.

Automotive

          Source: MediaTek

• MediaTek confirmed that it never exited the automotive space, but rather deprioritized it. However, this has dramatically changed. The company recently announced new automotive solutions and we expect more design wins in 2023.
• The company forecasts that its automotive revenue will reach $200 million in 2023.
• MediaTek unveiled MediaTek Dimensity Auto:
  • Dimensity Auto Cockpit: Displays, 16 ISP cameras, theatre quality surround sound, 3nm advanced process
  • Dimensity Auto Connect: Wi-Fi, Bluetooth, 5G for supporting cockpit connection, multiple displays, hotspot support, 4x to 5x faster speeds than home gateways.
  • Dimensity Auto Components: MediaTek will supply many of the components that faced extreme shortages during the COVID-19 pandemic including power management ICs, display driver ICs and global navigation satellite systems.
  • Dimensity Auto Drive: ADAS solution with time-of-flight solutions, Wi-Fi, LiDAR, radar and 60GHz supported; this product will be manufactured with partner companies.
• China may have more potential in the short term, but Europe and the US are expected to announce significant design wins in 2023. Mainstream and entry telematics solutions within Tier 1 OEMs may be the early low-hanging fruit.
• MediaTek has engaged with both Tier 1 and OEMs directly. Customers will be able to pick a la carte or all platforms. Of course, the aim is to sell the entire platform. Auto Cockpit and Auto Connect will likely contribute to the bulk of revenues in 2023/24.
• MediaTek will partner with companies to supply ADAS solutions.

Broadband

• Within broadband, MediaTek doubled its revenue over the past 18 months. Key customers include T-Mobile, Verizon, DT and Telefonica. Within cloud and enterprise, key customers include Cisco and Aruba.
• The company believes Industrial IoT has a $2.5 billion addressable market. Contributing to this market includes low-end industrial tablets, POS terminals, factory automation solutions and smart city applications. North America and Europe are driving this space in 2023.
• Wi-Fi 7 will get certification this year with manufacturers quickly moving to sell the latest version. There will be a longer runway for Wi-Fi 7, probably four years, which is an improvement over the shorter lifespans for Wi-Fi 6 and Wi-Fi 6E.
• Many smartphone flagships and premium notebooks in 2023 will feature Wi-Fi 7.
• 5G CPE sales have taken off. Globally, Counterpoint Research estimates fixed wireless access (FWA) added around 25 million subscribers in 2022. FWA speeds are sufficient, service prices are competitive, and the setup is simple. MediaTek estimates that it has a 65% market share in the CPE hardware ecosystem.
• The company is seeing a pickup in the adoption of 5G Redcap (reduced capability) in 5G IoT, wearables and AR glasses. These use cases cannot support 4x4 (antenna configuration) but can work with one antenna. Speeds are higher than LTE Cat 4 with lower latency. In addition, they have ultra-low power consumption capabilities.

VR and metaverse

• MediaTek is very upbeat about the potential growth of its metaverse business. The company believes its metaverse total addressable market (TAM) will grow to over $100 billion in 2030 from about $1 billion in 2023. While this is more aggressive than Counterpoint Research estimates, it is no doubt a critical space.
• MediaTek’s chipset is designed into the Sony PlayStation VR2 headset. We were able to test the VR device and each generation has made leaps in improvement. However, more improvements are still needed in various aspects.

Source: Sony

Satellite and NTN

Satellite is a new and exciting space which MediaTek has emphasized on more than on mmWave opportunities. There are different implementations adopted by various providers. MediaTek is taking an open standards approach.

• Use cases include two-way messaging, location sharing, weather forecasting, push-to-talk service, and emergency SOS. Commercialization is expected in 2025 or 2026.
• Release 17 will be key with two types of NTN satellite communications, which will enable IoT NTN and NR NTN. It will move data transmission from KBPS to MBPS, which will add new use cases.

Source: MediaTek

Q1 2023 results and 2023 outlook

Source: MediaTek

• Like many within the semiconductor sector, year-over-year comparisons look dire. According to Counterpoint Research estimates, the smartphone market will see a comeback in H2 2023 with volumes growing 12.5% over H1 2023. MediaTek has a similar outlook.
• Mobile customers’ inventories are still elevated but the situation has improved. Sluggish mobile demand in Q1 2023 slowed the recovery. Meanwhile, some smartphone OEMs’ inventories are back to normal.
• TV, broadband products, and smart edge are seeing market share gains despite market weakness.
• From a small base, automotive will see gains in 2023. MediaTek believes $200 million in revenue is possible in 2023. Growth rates are uncertain as the design win cycle is so much longer in automotive than in mobile.

As 2023 global smartphone volumes will likely decline over 2022 volumes, MediaTek is striving for growth in other areas such as hardware within consumer/home/broadband, gaming/XR, connected PCs, AI and automotive.