Data center ASIC growth diversification well backed by fund raising plan

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MediaTek

Data center ASIC growth diversification

well backed by fund raising plan

Maintain Rating: BUY | PO: 5,230 TWD | Price: 3,555 TWD

US$5bn financing budget offers ASIC business flexibility

03 August 2026

Mediatek on Friday evening (Jul 31 ) detailed its up to US$5bn fund raising it discussed

on its 2Q26 earnings call (see our 31 July note). Specifically, it is the framework

approved by the company’s BoD for flexible financing which allows the management

team to tap capital when needed for supply chain capacity planning and expansion

flexibility for data center related business especially to support different AI ASIC

business models. Based on its disclosure, the mix of the US$5bn funding could be a

combination of unsecured straight corporate bonds (up to US$5bn) and convertible

bonds (up to US$4bn) with a tentative 5-year duration. We note the ECB plan if fully

executed would mark one of the largest issuances in Taiwan corporate history where the

size is usually between US$500mn-1.5bn.

Equity

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Commitment to support “several ASIC projects” in tandem

It is important to note that it is the first time since 1997 that Mediatek has considered

fundraising through corporate bonds and convertible bonds, especially given its ~US$10bn

net cash position and its capex-light business model. We believe the financing budget

reflects the company’s ambition to secure capacity in a tight supply environment across

advanced front-end wafers, back-end packaging and testing, memory. Specifically, we

estimate the 2.5D/3D packaging is now 40-45% of the HPC logic chipset manufacturing

cost (vs. 25-30% for consumer IC) and could represent ~US$6bn/US$15bn revenue for

Mediatek out of its total TPU revenue of BofAe US$15bn/US$40bn in ‘27/28, requiring its

downpayment especially for EMIB-T if the technology could be on track for ramp. In

addition, while the company’s current partnership with Google on TPU does not include

HBM procurement, the other hyperscaler projects including xAI and potentially Meta might

need Mediatek’s support for long term agreement prepayment to memory makers.

Troughing '27-28 valuation provides parti. attractive opp.

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