MediaTek: Concerns on smartphone order cuts and ASIC competition overdone

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MediaTek: Concerns on smartphone order cuts and ASIC competition overdone

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MediaTek

Concerns on smartphone order cuts and

ASIC competition overdone

Maintain Rating: BUY | PO: 5,100 TWD | Price: 3,880 TWD

Softer smartphone demand already priced in 26 June 2026

Mediatek’s share price has corrected 28% from the recent peak despite firmer business Equity

visibility for its ASIC projects and capacity allocation. Specifically, the market is

concerned on a weaker than expected smartphone inventory build in 2H26 amid rising Haas Liu >> Research Analyst

component costs and supply constraints especially in memory, risking the Android Merrill Lynch (Taiwan)

smartphone shipment -25-35% YoY. While the supply chain feedback does suggest the +886haas.liu@bofa.com2 2376 3727

muted mainstream smartphone demand environment has triggered mild 5nm and 3nm Mike Yang >>

mobile SoC order cuts, our estimates are already conservative and we model MediaTek’s Research Analyst

Merrill Lynch (Taiwan)

sales to fall by 3%/4% QoQ in 2Q/3Q26, with smartphone SoC shipment -10%/-5% QoQ mike.c.yang@bofa.com

before an uptick in 4Q26 supported by the initial cloud ASIC project ramp. Cathy Hsu >>

Research Analyst

Cloud ASIC projects on track to ramp through 2028 Merrillcathy.hsu3@bofa.comLynch (Taiwan)

Investors’ concern about the ASIC competitive landscape also arises following

Qualcomm’s recent Investor Day where the company confirmed socket wins at Meta and

Microsoft and guided its datacenter sales to reach US$5bn in FY27. However, we are

Stock Dataconfident in TPU v8t on track to ramp up meaningfully from 4Q26, with revenue

contribution reaching US$2.1/US$13.3bn in 2026/27E. On top of the firm visibility from Price 3,880 TWD