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MediaTek expects weaker Taiwan dollar to help Q3 sales

MediaTek expects weaker Taiwan dollar to help Q3 sales

Taipei, Aug. 12 (CNA) MediaTek Inc., a leading Taiwanese integrated circuit designer, said Wednesday it expects to post better-than-expected sales in the third quarter because of a weakening Taiwan dollar.
David Ku, chief financial officer of MediaTek, said the recent depreciation of the Taiwan dollar against the U.S. dollar was steeper than the company previously anticipated.
The Taiwan dollar fell NT$0.320 to close at NT$32.080 against the U.S. dollar on Tuesday, the lowest level in five years, after the People's Bank of China cut the Chinese yuan's reference rate against the greenback by a record 1.86 percent.
The Chinese central bank's move sent regional currencies into a tailspin that continued Wednesday morning, when it cut the yuan's reference rate an additional 1.62 percent against the greenback.
That pushed the Taiwan dollar to NT$32.199 against the U.S. dollar Wednesday at noon, down NT$0.119 from the previous day's close. Analysts said the yuan's depreciation has sparked another currency competition in the region, and they believed the Taiwan dollar could fall further as long as China continues to depress its currency to protect Chinese exporters and boost its economy.
MediaTek sets product prices in U.S. dollar terms and a devalued local currency will boost the Taiwan dollar value of its sales.
At an investor conference on July 31, MediaTek said its third quarter consolidated sales would range between NT$51.7 billion and NT$55.5 billion, up 10-18 percent from a quarter earlier.
That forecast was about 20 percent lower than the market had expected.
According to MediaTek, the Q3 sales guidance was made based on the assumption that the Taiwan dollar would trade at an average of NT$31.50 to the U.S. dollar during the quarter.
Ku said the steep decline in the Taiwan dollar will no doubt give a boost to MediaTek's sales for the July-September period, but he cautioned that the actual figure will depend on how the Taiwan dollar moves down the road.
Despite the positive leads resulting from the weakness of the Taiwan dollar, shares of MediaTek had fallen 2.29 percent to NT$277.50 (US$8.67) as of 12:18 a.m., as the stock was caught in an overall market fall triggered by a plunge on Wall Street overnight. (By Jackson Chang and Frances Huang)


Updated : 2021-09-27 00:55 GMT+08:00