MediaTek: Currently unable to supply mobile SoC chips to Huawei and will not compete head-on

At the French speaking meeting held on July 28, Rick Tsai, Vice Chairman and CEO of MediaTek, said in response to the shareholders' questions that, in terms of the smartphone market in Chinese Mainland, we have seen a significant decline in inventory in the second quarter, and it is expected that the inventory will continue to improve in the third quarter. In terms of terminal market demand, we are cautious about the growth of the smartphone market, but do not believe that it will decline in the future.

A shareholder asked, Huawei's sales increased by 76.1% year-on-year in the second quarter, and it is expected to launch new flagship models in the future. What is the impact on MediaTek? Does MediaTek have a license to supply chips to Huawei? Rick Tsai said, "I want to make it very clear that MediaTek is not qualified to supply Huawei with smart phone SoC chips, etc. As for the impact of Huawei's sales increase on MediaTek, the most important thing is to see that Huawei's Mate series and P series belong to high-end models." Rick Tsai believes that MediaTek and Huawei target different markets, so they will not compete head-on.

At the French speaking conference, Rick Tsai said that the decline in smartphone sales since 2023 is mainly due to the extension of the replacement cycle of consumers, reaching nearly 24 months. Regarding the development of AI field, MediaTek has been committed to integrating APUs for artificial intelligence computing in mobile SoC. With its powerful performance, it can achieve generative AI on mobile phones, such as ChatGPT functions. In addition, MediaTek is working closely with customers to explore the application direction in the AI field. In the future, MediaTek's chips will also support larger scale AI models.