MediaTek to snip prices to cut inventory

MediaTek to snip prices to cut inventory

The company is expected to reveal its portfolio for the third quarter at the investors’ conference

Friday, July 30, 2010

TAIPEI: MediaTek has reduced prices of its chips up to 5 -15 per cent in a bid to cut inventory. The move is likely to affect the company’s revenues and gross profit target for the third quarter.

The company is expected to reveal its portfolio for the third quarter at the investors’ conference. According to the sources, company is expected to see a fall of 5-15 per cent sequentially, to NT$27-29 billion (US$84.4-90.6 million) In the third quarter it is likely to see a decline in gross margin to 50 per cent to 52 per cent down from the 56.7 per cent recorded in the first quarter.

The Chinese- language Commercial Times quoted a JP Morgan Chase report as saying that the company has lowered its target price for MediaTek’s shares to NT$ 380. MediaTek’s share price on July 28 had shown a decline NT$ 14 or to 3 per cent to close at NT$ 442 on Taiwan Stock Exchange (TSE). Industry sources said MediaTek is expected to retain its momentum as Chinese clients begin to build up inventory for the October1 holiday.

©Reuters