Q2 2026 MediaTek Inc Earnings Call Transcript
Key Points
- MediaTek Inc (TPE:2454) reported Q2 2026 revenue of TWD152.2 billion, exceeding the high end of its guidance, driven by solid momentum in Smart Edge platform products.
- The company's first AI accelerator ASIC is on track for production in Q4 2026, with data center revenue expected to exceed $2 billion in 2026 and scale substantially in 2027.
- MediaTek Inc (TPE:2454) raised its 2027 data center TAM estimate to $80 billion and increased its market share target to 15%-20%, up from 10%-15%.
- The second AI accelerator ASIC is progressing well, with improved compute performance and on-track yield/reliability for high-volume production in 2028, which is expected to significantly enhance market share.
- Smart Edge platforms revenue grew 19% quarter-over-quarter and 26% year-over-year, driven by market share gains in connectivity, computing, and automotive, plus a new collaboration with NVIDIA on RTX Spark PCs.
- The company's 448G SerDes development is on track, and it is advancing CPO and 3.5D platform solutions to support next-generation data center connectivity.
- MediaTek Inc (TPE:2454) has a strong balance sheet with over $7 billion in cash and approved a $5 billion discretionary financing budget to secure supply chain capacity and support long-term growth.
- The company is taking pricing actions to reflect rising supply chain costs, aiming to maintain gross margins within the current guidance range.
- Full-year 2026 revenue is expected to achieve the high end of the target range, with high single-digit percentage growth in US dollars.
- Mobile phone revenue declined 14% quarter-over-quarter and 20% year-over-year due to weak demand from increasing smartphone costs, with global smartphone shipments expected to decline about 15% in units this year.
- Gross margin decreased 2.9 percentage points year-over-year to 46.2%, partly due to a one-time benefit in the prior year quarter, and is expected to remain flat in Q3 2026.
- Operating income fell 22.2% year-over-year, and operating margin declined 4.5 percentage points year-over-year to 15%.
- Net income decreased 12.3% year-over-year, with EPS down from TWD17.5 to TWD15.28.
- The company faces rising supply chain costs, which it is passing through to customers, but this is not expected to improve gross margins.
- Data center ASIC gross margins are expected to be slightly dilutive to corporate average, though operating margins should be accretive once scaled.
- The company is investing heavily in new technologies, leading to higher absolute operating expenses, though the ratio is expected to decline.
- The mobile phone segment is expected to be flat to decline mid-single-digit percentages sequentially in Q3 2026, as flagship SoC ramp offsets weakness in other segments.
Welcome to the MediaTek 2026 second quarter investors conference call. Financial results and presentations for today's call are available on the Investors section of the company website at www.mediatek.com.
And now I would like to turn the call over to Ms. Jessie Wang, Deputy Director of Investor Relations. Ms. Wang, please go ahead.
Good afternoon, everyone. Joining us today are Dr. Rick Tsai, MediaTek's CEO; and Mr. David Ku, MediaTek's CFO. Mr. Ku will report our second quarter results, and then Dr. Tsai will provide our prepared remarks. After that, we will open for Q&A. As a reminder, today's presentation will provide forward-looking statements based on our current expectations. The statements are subject to various risks and factors, which may cause actual results to differ materially from these statements.
The presentation materials supplement non-TIFRS financial measures. Earnings distribution will be
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