TAIPEI (Taiwan News) — MediaTek on Thursday warned its smartphone business could drop sharply in Q1, forecasting revenue of up to 6% below the previous quarter.

MediaTek CEO Rick Tsai (蔡力行) said Q1 revenue is expected to range between NT$141.2 billion (US$4.46 billion) and NT$150.2 billion, flat to down from Q4 2025, per CNA. He said weaker smartphone demand and rising costs could pressure performance, per Liberty Times.

MediaTek reported Q4 revenue of NT$150.19 billion, up 5.7% from the prior quarter, driven by higher shipments of its Dimensity 9500 flagship chip and favorable exchange rates. Gross margin slipped to 46.1%, while net profit fell 9.1% to NT$22.93 billion, with earnings per share of NT$14.39.

For full-year 2025, revenue rose 12.3% to NT$595.97 billion, marking solid top-line growth. Gross margin declined to 47.5%, while net profit edged down 1% to NT$105.32 billion.

Tsai said smartphone-related revenue topped NT$316.85 billion last year, a record high and an 8% increase from a year earlier. Flagship-tier chips contributed about NT$95.06 billion, underscoring MediaTek’s push into higher-end products.

Looking ahead, MediaTek expects Q1 gross margin of between 44.5% and 47.5%. Tsai said rising memory prices and higher overall costs could weigh on smartphone demand.

Tsai said MediaTek will work with customers and adjust its product mix to offset pressure. He said that while smartphone revenue is expected to decline, smart device platforms should grow and power management chip revenue is likely to remain flat.