MediaTek gains new AI customer
‘ON SCHEDULE’: Chief executive officer Rick Tsai said that TSMC ‘remains our most important partner’ as MediaTek seeks to meet robust customer demand
By Lisa Wang / Staff reporter
Chip designer MediaTek Inc (聯發科) yesterday said it has secured a second customer for its customized artificial intelligence (AI) accelerator for data centers, while volume production of a second-generation chip for an existing customer is on track for early 2028, potentially easing market concerns about possible delays.
This is a new customer and, crucially, not from China, MediaTek said.
The remarks were meant to dismiss speculation that ByteDance Ltd (字節跳動), the parent company of TikTok, was the second customer for MediaTek’s new customized AI application-specific integrated circuit (ASIC) business.
Nvidia Corp chief executive officer Jensen Huang, left, and MediaTek chief executive officer Rick Tsai attend a news conference in Taipei on June 2.
Photo: CNA
“It is on track, on schedule. We understand there is some noise about the tape-out schedule,” MediaTek chief executive officer Rick Tsai (蔡力行) told investors during an earnings call.
The company’s second AI chip is a powerful XPU using multi-die architecture, he said.
A few dies have already been taped out, while another, larger and more complex die is on schedule to tape out in the coming weeks, he said.
Overall, MediaTek expects to ramp up volume production of the AI accelerator in the first quarter of 2028, he said.
Addressing investor concerns over the adoption of Intel Corp’s advanced packaging technology, called EMIB-T, Tsai said that Intel’s packaging process is “our absolute priority.”
“We are working very closely with our IDM [integrated device manufacturer] partner, with a primary focus on yield improvements,” he said.
MediaTek is using Intel’s EMIB-T advanced packaging for the second-generation project, while continuing to work with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
However, MediaTek is not dependent on a single supplier, Tsai said.
“It is critical to make clear that TSMC remains our most important partner,” he said, adding that the company must adapt to changing customer requirements amid a rapidly growing AI market.
MediaTek said that its first AI ASIC program is progressing smoothly, with initial shipments commencing last month.
The chip is projected to generate US$2.5 billion in revenue this quarter, it said.
MediaTek said it anticipates revenue from the program next year to be at the high end of its target at about US$16 billion, capturing roughly 20 percent of the total AI ASIC market.
“This confidence is underpinned by our solid supply outlook. We are working closely with our supply chain partners for additional capacity to meet the strong customer demand,” Tsai said.
MediaTek has not named its existing customer, widely reported to be Google, with MediaTek designing a tensor processing unit — an AI ASIC — for it.
MediaTek said that it is working with its customer on a third-generation AI ASIC project and is in discussions to finalize the details.
The chip designer yesterday said it expects robust revenue growth this quarter of 25 to 32 percent sequentially to between NT$210.1 billion and NT$221.8 billion (US$6.47 billion and US$6.83 billion).
On an annual basis, that would be growth of 40 to 48 percent, it said.
Based on the revenue guidance for this quarter, MediaTek expects full-year revenue growth in US dollar terms would exceed its previous target of high-single-digit percentage growth.
Gross margin is expected to be 43.5 to 46.5 percent this quarter, compared with 46.3 percent last quarter, MediaTek said.
Operating profit margin from this quarter through next year is expected to show a marked improvement, it said.
The firm expects operating margin of at least 20 percent next year, as production of AI ASIC scales, MediaTek chief financial officer David Ku (顧大為) told investors.
Net profit last quarter expanded 14.6 percent sequentially to NT$28.2 billion from NT$24.61 billion in the second quarter, MediaTek said.
That represented annual growth of 10.8 percent from NT$25.45 billion.
Earnings per share rose to NT$17.5 last quarter from NT$15.28 in the second quarter and NT$15.84 in the third quarter last year.
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