Taiwan chip designer predicts higher Q3 sales

Taiwan's top chip designer Mediatek sharply raised its estimate for third-quarter sales growth to 22% to 25% due to robust handphone demand in emerging markets such as China, a Reuters report said.

Analysts had generally expected the firm to revise its target upwards, but the scope of the rise caught some off guard, the Reuters report added.

'I'm not too surprised with Mediatek's upward revision. But their latest growth figure came to me as a little surprise,' Eric Chen, an analyst at BNP Paribas, was quoted as saying.

In July, Mediatek said its third quarter sales would grow 8%-10% from the previous three months and that its gross profit margin would be flat during the same period, after its second quarter net profit fell by a third to NT$5.1 billion (€113 million,US$160 million).

That 8%-10% estimate was lower than some forecasts, with BNP Paribas saying in a report in late August that it expected Mediatek's third quarter sales to rise 18%, while Macquarie Research on Wednesday put the figure at 15%-20%, the Reuters report further said.

Mediatek is likely to benefit from robust cellphone demand in China, where the handset manufacturing supply chain is outperforming the global market, analysts said.

China telecom firms are also spending aggressively to upgrade their cellphone networks, a move that is expected to boost demand for mobile phones.

Mediatek said its latest forecast was based on strong orders in emerging markets such as China and India.