Top

Insights Tag: LTE chipsets

Weak Q4 2022 for MediaTek; Revenues to Further Decline in Q1 2023

  • MediaTek’s revenue was down 25% YoY and 26% QoQ in Q4 2022.
  • The mobile phone segment’s revenue declined 25% YoY and 30% QoQ.
  • MediaTek has downgraded Q1 2023 revenues to $3.0-$3.4 billion, a decline of 35-40% YoY and 3-12% QoQ.
  • The company has guided the inventory levels to normalize by the end of H1 2023.

MediaTek has reported $3.4 billion in revenue for Q4 2022, down 25% YoY and 26% QoQ. For the full year of 2022, the revenue was $18.7 billion, up 6% YoY. MediaTek delivered a strong H1 2022 driven by 5G SoCs but a weak H2 2022 due to macroeconomic headwinds and customer inventory adjustments. The QoQ decline was due to the slow China market, weak consumer demand and inventory correction by smartphone OEMs. The mobile phone segment’s revenue declined 25% YoY and 30% QoQ due to aggressive inventory adjustments by customers. The segment contributed 52% of MediaTek’s Q4 2022 revenue.

MediaTek Q4 Earning

 

Highlights

  • The smart edge segment, which contributed 42% to the company’s revenue in the fourth quarter, declined 18% sequentially due to order cuts from telecommunication operators for inventory adjustment. Revenues from enterprise ASIC and automotive products increased due to growing popularity in the US and Europe regions.
  • The power IC segment accounted for 6% of MediaTek’s revenue, declining 37% QoQ in Q4 owing to weak demand from consumer devices such as smartphones. But the demand for power ICs from automotive and industrial applications increased in Q4.
  • Changing view from the previous quarter’s guidance, MediaTek downgraded Q1 2023 revenues to the range of $3.0-$3.4 billion, a decline of 35-40% YoY and 3-12% QoQ. Gross margins in Q1 2023 are expected to be around 47.5% and the operating expense ratio around 33%. Most smartphone OEMs will follow a conservative approach to maintaining their inventory. Smart TV and Wi-Fi will see a slight increase in demand in the first quarter.
  • MediaTek also launched satellite-based connectivity solutions with Bullitt group, to be available in Q1 2023. MediaTek is the third player after Apple and Qualcomm to offer satellite-based connectivity solutions.
  • MediaTek guided the inventory levels to normalize by the end of H1 2023. This is in line with our view. In H2 2023, MediaTek expects to see growth in revenues. Currently, Chinese smartphone OEMs have 3-3.5 months of smartphone inventory levels, which will come down to 2-2.5 months by the end of Q1 2023.
  • According to Counterpoint Research’s Smartphone AP/SoC Shipment Tracker, MediaTek shipments have declined due to ongoing inventory adjustments, global macroeconomic situation, and a weak China market. LTE SoCs declined more than 5G SoCs in Q4 2022.
  • Overall, weak guidance from MediaTek for Q1 2023. The first half of 2023 is going to be tough due to inventory correction and macroeconomic uncertainties. We forecast the market to bounce back and inventory levels to come back to normal in the second half. We expect the overall smartphone shipments to be flat in 2023. Therefore, despite the growth in the second half, we forecast smartphone AP SoC shipments to contract in 2023.

Related Posts

  1. Counterpoint Quarterly Reports: Q4 2022
  2. LG Electronics Operating Profit Stumbles in Q4 2022
  3. NXP Reports Record Revenue in 2022, Automotive Shines
  4. BoM Analysis – Samsung Accounts for More Than 50% of BoM Cost in Google’s Pixel 7 Pro
  5. China Smartphone Sales in 2022 Reach Lowest Level in a Decade; Apple Becomes #2 Brand for First Time
  6. Infographic: Q3 2022 | Semiconductors, Foundry Share and Smartphone AP Share
  7. MediaTek Targets Diverse Technology Verticals With 4 New Chipsets
  8. Qualcomm Delivers Record Revenues Amid Challenging Macro Environment
  9. MediaTek Weather’s Macroeconomic Headwinds With 9% YoY Revenue Growth
  10. Quarterly Firsts: India Smartphone Shipments Show YoY Q3 Decline, iPhone Model Tops India Shipment Chart
  11. MediaTek records impressive quarter, strong growth from 5G flagships
  12. MediaTek Unveils Three Smartphone SOCs
  13. Entry Into Flagship Segment, 5G AP/SOCs Lead to Strong Growth for MediaTek in Q1 2022

MediaTek Weather’s Macroeconomic Headwinds With 9% YoY Revenue Growth

MediaTek‘s revenues fell 8.7% sequentially but increased 8.5% YoY to NT$142.1 billion. On a USD basis, revenues were comparatively flat due to FX weakness. Global macro headwinds, inventory correction, slow China market and weak consumer demand led to the revenue decline and weak outlook. Declining 8% QoQ, the smartphone segment contributed to 55%  (NT$ 78.2 in Q3 2022) of MediaTek’s total revenue in Q3 2022. Smartphone segment demand was affected by customers’ inventory adjustments, especially in the 5G mid-range SoCs. Demand for LTE SoCs was strong in QoQ terms.

MediaTek Earning 2022 Q3

 

  • The company has expanded its portfolio for the flagship and mid-range segments by launching Dimensity 9000+ and Dimensity 1050, respectively. The newly launched premium SoC has been adopted by top-end gaming smartphones. Also, MediaTek will launch a next-generation flagship SoC in Q4 2022. This will add to its premium segment revenue.
  • The Smart Edge segment, which contributed 38% to the company’s revenue in the third quarter, declined 9% QoQ as telecommunication operators cut back on orders, negatively impacting the company’s Wi-Fi and wired businesses. Also, the consumer market weakness affected the tablet, Chromebook and monitor businesses.
  • The power IC segment, which accounted for 7% of MediaTek’s revenue in Q3 2022, declined 17% QoQ due to weak demand for power ICs in consumer devices such as smartphones and PCs. But demand for power ICs for automotive and industrial applications remained robust in Q3 2022.
  • MediaTek guided Q4 2022 revenues in the range of NT$108 billion to NT$119.4 billion ($3.4 billion to $3.8 billion), a decline of 16%-24% QoQ and a decline of 7%-16% YoY. The gross margin is expected to be around 48.5% and the operating expense ratio is expected to be 31%. LTE SoCs will decline more severely than 5G SOCs in Q4 2022. Wi-Fi, broadband and routers will also be impacted as some of the Wi-Fi operators will slow down their fourth-quarter buy-in. The company also projected a sequential increase in revenues in Q1 2023.
  • The inventory level came down in Q3 2022 compared to the previous quarter. For both 4G and 5G, SoC inventory will come down in Q4 2022. Inventory corrections will be normalized in H1 2023.
  • According to Counterpoint Research’s Smartphone AP/SoC Shipment Tracker, MediaTek dominated the smartphone AP/SoC market in Q3 2022 with a share of 36.5%, followed by Qualcomm. MediaTek shipments have declined due to order cuts from major Chinese OEMs. MediaTek’s relatively greater dependence on the mid-end and low-end smartphone segments, which are likely to be more affected by the current macroeconomic situation as well as excess channel inventory, will lead to a weaker fourth quarter.

Overall, weak market outlook for Q4 2022 from MediaTek echoes increasingly cautious views from the foundry and IC packaging makers, which are seeing a slowdown in smartphone IC orders in early 2023. We expect 2023 to be challenging with inventory correction going on till H1 2023 and coming down to a normal level (80-90 days) by the end of 2023. The demand outlook for 2023 also looks challenging after inventory corrections due to macroeconomic uncertainty and weak China market. From the technology migration point of view, 5G SoCs are going to be a growth opportunity for the company. MediaTek will focus on maintaining gross margin, following price discipline at a time of uncertainty in the global semiconductor industry.

Qualcomm Dominates Premium Android Smartphone Chip Market in Q1 2022

Both Qualcomm and MediaTek posted healthy growth in Q1 2022. MediaTek recorded an impressive set of numbers for the quarter with revenues growing 32% YoY and 10.2% QoQ to reach $4.8 billion. Qualcomm saw its third consecutive quarterly record revenue in Q1 2022 at $11.6 billion. Its business units recorded annual growth of between 28% and 61%.

MediaTek led the Android smartphone SoC market in 2021 with a 44% share, followed by Qualcomm with 35%, according to the latest research from Counterpoint’s Global Handset Model Sales Tracker.

Qualcomm’s focus on the premium smartphone segment (>$500) has helped it to grow revenues. Its Snapdragon 800 series and Snapdragon 700 series, notably the flagship Snapdragon 8 Gen 1 and Snapdragon 778G, are both key volume drivers. Furthermore, Qualcomm has gained a 75% share of Samsung’s Galaxy S22 series shipments. In previous Samsung flagship models, there was a more equitable split between Qualcomm Snapdragon-powered SKUs and Samsung Exynos-powered SKUs. Qualcomm is also driving more revenues with its RFFE (RF Front End), allowing it to capture a higher share in the BoM.

MediaTek dominates the low-mid tier wholesale price segment ($100-$299), driven by its Dimensity 700 and Dimensity 900 series. Also, the 4G SoC in the <$199 price band is driven by the P35, G80 and G35 chipset models. MediaTek has entered the premium segment with the Dimensity 9000 series, but the sales will only start to pick up in Q2 2022.

AP Chipset Share for Android Smartphones by Price Band, Q1 2022

SOC by smartphone price tier Counterpoint

Qualcomm

  • Qualcomm is focusing on the premium (>$500) and mid-high ($300-$499) segments for revenue growth. Qualcomm is an industry benchmark when it comes to premium smartphones.
  • Qualcomm’s focus is on the 7 and 8 series Snapdragon chipsets, which drive higher revenue and profitability. Qualcomm acknowledged it has seen a slowdown in the low- and mid-price tiers. But this was more than offset by strong premium-tier sales.
  • Further, the design wins with 75% of sales of the Galaxy S22 family, up from 45% of the S21 family, helped Qualcomm strengthen its position in the premium Android segment in Q1 2022.
  • According to Counterpoint’s Global Smartphone AP-SoC Shipments and Forecast Tracker, the premium segment Qualcomm Snapdragon 700 and 800 series contributed around 68% of the AP/SoC shipments in Q1 2022.
  • Qualcomm’s share in the >$500 band increased from 47% in Q1 2020 to 71% in Q1 2022, growing 23% YoY in Q1 2022, owing to the launch of its Snapdragon 888 and Snapdragon 8 Gen 1 chipsets.
  • Focus on the premium segment will help Qualcomm ride out the slow China market, global macro-economic situation and high inventories.

MediaTek

  • MediaTek dominated the <$299 price tier and drove significant volumes both for 4G and 5G in this tier. Entry of the Dimensity 9000 enables MediaTek to capture share in the premium band (>$500). This is the first time MediaTek has entered this tier. MediaTek has already announced design wins with Chinese smartphone OEMs like OPPO, vivo, Xiaomi and HONOR. This opens more competition and opportunities for growth in the premium segment.
  • The volume in the ≤$99 price band was driven by LTE smartphones, where MediaTek captured a 47% share. LTE SoCs have been affected by the ongoing shortages and will be in short supply in 2022.
  • In the $100-$299 price band for Android, MediaTek captured a 60% share in Q1 2022 driven by its Dimensity 700 and 900 series.
  • MediaTek will continue to gain share in the $100-$299 price band as 5G penetrates markets like India, APAC others, LATAM and MEA. Smartphone OEMs like Xiaomi, Samsung, OPPO and vivo will likely launch affordable 5G smartphones under $200.
  • MediaTek has entered the premium segment with its Dimensity 9000 series. However, the sales are only expected to pick up in Q2 2022.
  • Overall, we forecast around an 8% share for MediaTek in the premium segment in 2022. MediaTek growth in Q2 2022 is expected to come from mid-high range phones due to the shifting of demand from LTEto 5G AP/SOCs. Further, with the launch of the Dimensity 8000 series, MediaTek wants to focus on and consolidate the $300-$499 price bands. This will also help MediaTek pivot volumes from the low-mid segment to mid-high to premium segments.

Samsung

  • Samsung Exynos’ share declined in Q1 2022 due to the loss in share to Qualcomm in the Galaxy S22 series and also due to the low yields of the 4nm premium Exynos chipsets.
  • Share in the premium segment declined from 34% in Q1 2021 to 23% in Q1 2022.
  • Samsung has launched the Galaxy A33 and A53 with its Exynos 1280 SoCs. These are the volume drivers that will help it to regain share from MediaTek and Qualcomm through the rest of 2022.
  • In the low-mid segment ($100-$299), Samsung’s share declined to 7% in Q1 2022 from 10% in Q1 2021 due to outsourcing of its models (A, F and M series) to ODMs, which integrated mostly Qualcomm, MediaTek or UNISOC solutions in different models depending on the target price bands.
  • In the low tier, Samsung is using UNISOC SOCs in the Galaxy A03 smartphone. The share of Samsung smartphones is almost negligible in this segment.

UNISOC

  • UNISOC continues to gain share in the low bands (<$99) driven by the LTE portfolio. Its share in the <$99 band grew to 47% in Q1 2022 from 20% in Q1 2021.
  • With realme, HONOR, Motorola and Samsung launching phones with its Tiger series SoC, UNISOC has expanded its customer base with design wins at ZTE and TECNO and entry into the Samsung Galaxy A series.
  • It has also captured an 8% share in the $100-$199 price band with HONOR, realme and Samsung.
  • For 2022, we expect UNISOC to maintain the momentum with its portfolio catering to LTE smartphones, as MediaTek struggles with supply issues for 4G chipsets and Qualcomm focuses on 5G solutions. Also, a few design wins with 5G chipsets will add to its overall volumes and help support its value growth.

HiSilicon

  • We expect HiSilicon volumes to decline in 2022 as the inventory is depleted. Huawei has already started using Qualcomm SoCs in its new launches, but these are limited to 4G due to the prevailing US sanctions.

Related Posts

  1. Android Smartphone SoC Market: MediaTek Leads in Low-Mid Tiers, Qualcomm in Upper
  2. Apple’s Record Quarter Shadowed by Continued Shortages, Other Risks
  3. Entry Into Flagship Segment, 5G AP/SOCs Lead to Strong Growth for MediaTek in Q1 2022
  4. Foundry Strategy & Chipsets Supply Shaping Smartphone SoC Competitive Dynamics in 2021
  5. Global 5G Smartphone Sales Penetration Surpassed 4G for First Time in January 2022
  6. MediaTek Captures Record 43% Share of Smartphone AP/SoC Shipments in Q2 2021
  7. MediaTek Leads Smartphone SoC Shipments in Q3 2021; UNISOC Reaches Double-digit Share
  8. Qualcomm Bolsters Automotive Presence with One More Deal
  9. Qualcomm Gains Share in Smartphone AP/SoC Shipments in Q4 2021; MediaTek Continues to Lead
  10. TSMC Price Hike Indicates Capacity Tightness to Persist in 2022, May Hit Smartphone Shipments
  11. US Smartphone Sales Decline 6% YoY in Q1 2022 as Pandemic Demand Cools
  12. Xiaomi Updates: Q3 2022

Entry Into Flagship Segment, 5G AP/SOCs Lead to Strong Growth for MediaTek in Q1 2022

  • MediaTek recorded an impressive set of numbers for Q1 2022 with revenues growing 32% YoY and 10.2% QoQ to reach $4.8 billion. The company’s mobile phone segment achieved a revenue of $2.7 billion, growing 29% YoY. According to Counterpoint Research’s Smartphone, AP/SOC Shipment Tracker, the addition of the Dimensity 9000 to the premium segment has added meaningfully to the overall revenues that have also been driven by 5G AP/SOCs in the mid-tier segment. LTE AP/SOCs are still attracting high demand and will be in tight supply throughout 2022. Based on our data, LTE AP/SOCs contributed to one-third of the total AP shipments in Q1 2022.
Counterpoint Research MediaTek revenue by segment
MediaTek Revenue by segment
  • The smart edge segment contributed 39% to MediaTek’s Q1 2022 revenues. This segment is mainly driven by the Wi-Fi 6/6E migration and higher-end solutions for smart TVs and tablets. Technology migration trends in smart edge platforms have led to a higher blended ASP in this segment.
  • The power IC segment accounted for 8% of the total revenues, growing 52% YoY and 21% QoQ. A large part of the PMIC segment’s revenue is coming from displays and smartphones. Automotive and industrial applications contribute to 10% of the PMIC revenue and will drive growth for this segment in 2022.
  • MediaTek guided revenues to be in the range of $5-$5.3 billion in Q2 2022, up 3~10% QoQ and 17~25% YoY. The mobile phone segment will show the strongest growth due to the shifting of demand from LTE to 5G AP/SOCs. As the China market is slowing, the revenue growth will come from other regions like India and Europe. Also, the Dimensity 9000 and 8000 series will continue to add to the revenues in Q2 2022. However, due to the slowdown in China and deteriorating macroeconomic conditions, we have reduced our H2 2022 forecast for the Dimensity 9000.
  • Revenues from Wi-Fi 6, 5G SIM modem, 5G tablet, 10G-PON and 4K smart TV are also expected to grow strongly in H2 2022. Also, MediaTek’s mmWave SOC is on schedule to ship in the second half of 2022. It will pave the way for MediaTek’s further expansion in the global market.
  • According to Counterpoint Research’s Smartphone AP/SOC Shipment Tracker, MediaTek will continue to lead the smartphone AP SOC market with a volume share of 41% in Q2 2022, followed by Qualcomm with 27%. The company’s strategy of 5G, Wi-Fi 6, focused product migration, geographic expansion with global customers, and penetration into high-end and flagship segments will allow MediaTek to retain and even improve its strong market position.
  • China slowdown, COVID-19 lockdowns and macroeconomic conditions will affect the global smartphone market. MediaTek guides flat growth for the smartphone market in 2022 and 5G penetration (660-680 million units) reaching 50%. Further, 5G penetration is expected to reach 70% in the next two years.
  • Smartphone OEMs like OPPO, vivo and Xiaomi currently have inventories with distributors and also for components like AP/SOCs, PMICs and DDICs. This has led to a drop in AP/SOC orders for MediaTek for H2 2022. But MediaTek is keeping a high inventory reserve this quarter to sustain its OEM and ODM partners during the worsening COVID-19 situation. MediaTek normally runs with around 90 days of inventory. But it has now raised this to around 100 days to manage potential supply constraints.
  • MediaTek sought to reassure investors that it would not follow a low pricing strategy to counter slowing demand. Instead, it will invest in future growth. Its pricing strategy will also leverage its high capacity and will manage profitability by maintaining similar pricing as the previous quarter. We expect overall 5G AP/SOC ASPs to be flat compared to last year. If the competition reduces the prices, it will be challenging for MediaTek to maintain growth in H2 2022. Due to the strong demand for LTE AP/SOCs, the ASPs will not decline this year. Overall, 5G AP/SOCs will have a premium pricing over LTE. The company is now focusing on developing 5G AP/SOCs for low-end phones priced less than $150. We believe this will happen two years down the line. However, based on our estimates, LTE is going to dominate the less than $100 smartphones, driven by regions like LATAM, Africa and APAC.
  • Presently, MediaTek is not a big player in the PC business, having only a few Chromebook-type devices in the market. The company played down its expectations for substantial growth in the PC sector while confirming that it was interested in the potential of the Arm-based PC market.
  • Smartphones still contribute 53% of the revenues for MediaTek. For longer-term growth, MediaTek has to reduce dependence on smartphones and expand into areas like the smart edge, automotive, connected PCs and AR/VR.

Related Posts

  1. Android Smartphone SoC Market: MediaTek Leads in Low-Mid Tiers, Qualcomm in Upper
  2. China Smartphone Market $250-$399 Price Band Share Grows 10% YoY in Q1 2022, vivo Takes Top Spot
  3. Global 5G Smartphone Sales Penetration Surpassed 4G for First Time in January 2022
  4. MediaTek Leads Smartphone SoC Shipments in Q3 2021; UNISOC Reaches Double-digit Share
  5. MediaTek Records Strong Revenues. Mid-teens Growth Expected Through 2025
  6. MediaTek Summit Key Takeaways: First Flagship 5G SOC, Tie-up With AMD, FiLogic 130 for IoT Devices
  7. MediaTek Weather’s Macroeconomic Headwinds With 9% YoY Revenue Growth
  8. Mid-tier Share in Global 5G Smartphone Shipments Grows to 37% in Q2 2021; vivo Leads
  9. Qualcomm Dominates Premium Android Smartphone Chip Market in Q1 2022
  10. Qualcomm Gains Share in Smartphone AP/SoC Shipments in Q4 2021; MediaTek Continues to Lead
  11. Qualcomm Retains Top Position in Global Cellular IoT Chipset Market in Q4 2021
  12. Smartphone ODM/IDH Companies’ 2021 Shipments Rise 6.4% YoY Despite COVID-19, Component Shortages
  13. US Smartphone Sales Remain Flat YoY in Q4 2021 Due to Shortages of Premium Flagships
  14. Xiaomi Updates: Q3 2022

Coverage

Insights

Social media

Contact us

Copyright ⓒ Counterpoint Technology Market Research | All rights reserved

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited

Registration

In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.