TAIPEI (Taiwan News) — MediaTek’s market capitalization hit NT$2.87 trillion (US$91.1 billion) on Monday, fueled by optimism over its artificial intelligence chip business.
MediaTek and Broadcom are expected to share Google’s expanded 3-nanometer Tensor Processing Unit supply next year. The TPUs are custom AI chips designed to accelerate both AI training and applications, according to Google.
Supply chain sources project Google’s TPU production next year at 6–7 million units, up from earlier forecasts of 5 million. Foreign investors say MediaTek stands to benefit from the demand, especially as it shifts design resources from smartphones to AI chips, according to Anue and Money Link.
As a fabless semiconductor company, MediaTek is responsible for key aspects of chip design and coordination with TSMC, which will manufacture the TPUs using its 3 nm process. The arrangement allows Google to diversify its supplier base while leveraging MediaTek’s experience, according to TipRanks.
MediaTek’s TPU shipments are expected to reach at least 2.5 million units next year. The average selling price is projected at NT$125,886 per chip, putting potential TPU revenue at NT$315 billion, accounting for roughly 30% of annual revenue.
MediaTek has not finished all tests on the 3 nm TPU yet, and production depends on specialized materials such as T-glass and substrates, which are a key industry bottleneck. Analysts said these factors will be critical in determining order allocations.
Foreign investors expect MediaTek’s revenue to grow modestly by 4% this year, but anticipate a potential 38% gain next year as TPU shipments ramp up. With a strong outlook for TPUs, they have assigned an “outperform” rating, signaling expectations that the stock will outperform the broader market.
The company’s target stock price was raised to NT$2,080. Shares closed at NT$1,775 on Tuesday, up from NT$1,485 three sessions earlier.
Foreign investors said that although smartphone demand remains weak, revenue from TPUs next year could make up for a potential shortfall in the mobile business. AI chips such as TPUs are expected to be major drivers of MediaTek’s growth over the next few years.
MediaTek will hold its fourth-quarter investor conference on Feb. 4. Analysts said whether the company reaffirms its projection of NT$31.5 billion in AI chip revenue this year will be a key indicator of the growing importance of AI chips to its business.
Investors are also expected to monitor MediaTek’s latest outlook on demand for high-end and mid- to low-end smartphones, along with how the company and its customers are managing tight supplies of critical components such as memory and substrates.
