MediaTek says AI demand growth will continue as chip designer expands accelerator business

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MediaTek expands AI business

Highlights

MediaTek's first AI accelerator began shipments last month, expected to generate $2.5 billion revenue in Q4, with strong ongoing demand.
MediaTek reported Q3 revenue of T$168.1 billion ($5.16 billion), up 18.3% year-on-year; net income rose 10.8% to T$28.2 billion.
MediaTek's $3.9 billion overseas convertible bond issuance in August drew $3.5 billion from Nvidia and participation from Alphabet, supporting its AI expansion.

AI accelerator pipeline and earnings outlook

As reported by Reuters, Chief Executive Rick Tsai said on Friday that demand growth for AI will continue "for sure," although the rate may vary. He said demand for MediaTek's first AI accelerator remains strong, with initial shipments having started last month and expected to generate $2.5 billion in revenue in the fourth quarter.

Tsai also said the company's second AI accelerator project remains on track for high-volume production in the first quarter of 2028. The update comes as MediaTek works to build a larger presence in AI chips for major cloud providers.

MediaTek reported third-quarter revenue of T$168.1 billion, or $5.16 billion, up 18.3% from a year earlier. Net income rose 10.8% year on year to T$28.2 billion.

Shift beyond smartphones lifts Taiwan chip profile

MediaTek has been reducing its reliance on smartphones and aims to become a significant supplier of custom AI chips to large cloud companies. In August, the company said it issued a record $3.9 billion in overseas convertible bonds, with Nvidia investing $3.5 billion and Alphabet also participating in the offering.

Tsai said TSMC is MediaTek's most important partner and that the two companies are working closely across the technology chain. MediaTek is a customer of TSMC, the world's largest contract chipmaker.

MediaTek is the second-most valuable company on the Taiwan stock exchange, with a market capitalization of $200 billion. Its shares closed down 3.2% on Friday ahead of the results, though the stock has risen 174% this year, compared with a 56% gain in Taiwan's benchmark index.

Our earlier analysis of the Nasdaq 100’s recent volatility focused on how AI supply-chain concerns and higher financing costs pressured tech and semiconductor shares. We noted that although the index rebounded, it remained below key moving averages, with mixed momentum and oversold signals pointing to fragile sentiment. The piece highlighted closely watched support and resistance levels as traders weighed AI-related risks ahead of major technology earnings.

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