UPDATE 1-Mediatek targets higher cellphone chip shipments

* Sees Q1 sales flat to up 5 pct from Q4

* Sees Q1 gross profit margin down from Q4

* Stock down 2.88 pct before forecasts
(Recasts, adds quotes and details)

TAIPEI, Feb 1 (BestGrowthStock) – Mediatek (2454.TW: ), the world’s
No.2 cellphone chip supplier, said it aims to ship 28 percent
more mobile phone chips this year, driven by growing demand in
emerging markets and as it sells more chips for feature-heavy
smartphones.

As Taiwan’s biggest chip designer, Mediatek said it would
sell multimedia chips with fatter margins and including software,
enabling clients such as Motorola (MOT.N: ) to shorten the design
time for new handsets.

“Growth in China and other emerging markets such as India
this year should help our business,” Chief Financial Officer Yu
Mingto told a teleconference on Monday. The company also
announced that its fourth-quarter net profit tripled from a year
earlier. For a table of the results, see [ID:nTPU002114].

Mediatek, which also designs and sells chips for DVD players
and digital TVs, said it expected its first-quarter sales to be
flat or rise 5 percent from the fourth quarter

Before the forecasts, analysts had expected Mediatek’s 2010
sales to grow 14 percent to T$132 billion ($4.1 billion) from
last year, according to Thomson Reuters I/B/E/S.

Mediatek said its gross profit margin would be about 56.5
percent in the first quarter, down from 58.7 percent in the
fourth quarter.

For the year, Mediatek said it expected to ship 450 million
cellphone chips, up from 350 million units in 2009.

In January, Mediatek said it planned to increase its global
headcount by more than 10 percent this year as it seeks to tap
rising demand for feature-heavy smartphones, a market that
industry analysts say could grow about 20 percent this year.

The company will start supplying new chips to smartphone
makers that run Google’s (GOOG.O: ) Android mobile software in
mid-2010. [ID:nTOE60B06F]

Qualcomm (QCOM.O: ) and Mediatek, the world’s two biggest
cellphone chip suppliers by revenue in July-September, entered a
patent arrangement late last year, paving the way for Mediatek to
tap the fast-growing smartphone chip market. [ID:nWNAB8303]

Mediatek’s forecasts were largely in line with market
expectations and came after the Taipei stock market closed on
Monday. The stock fell 2.88 percent, worse than the main TAIEX’s
(.TWII: ) 1.52 percent drop.

So far this year, the stock has fallen about 9 percent amid
worries that China’s tightened liquidity could hurt chip demand.
(US$1=T$32)

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UPDATE 1-Mediatek targets higher cellphone chip shipments