Taiwan's top chip design company, MediaTek, is responding to the growing demand for artificial intelligence (AI) applications by adjusting its prices due to supply chain challenges.
The surge in AI-driven demand has created significant strain on global supply chains, pushing up costs for companies like MediaTek and TSMC, the world's largest contract chipmaker.
During a quarterly earnings conference call, MediaTek's CEO, Rick Tsai, expressed confidence in the company's outlook but acknowledged the impact of supply chain disruptions. "With AI serving as a catalyst for industry expansion and driving the surge in demand, the global supply chain is facing challenges in fully meeting the increasing needs in 2026, resulting in higher costs across the supply chain," Tsai stated.
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He further elaborated that MediaTek would adjust its pricing to reflect these rising costs and ensure the allocation of supply aligns with the overall profitability of the company. This decision follows MediaTek's projection of significant earnings from AI accelerator ASIC chips, estimating revenue in the billions by 2027.
MediaTek's total addressable market (TAM) for data centre ASIC chips has increased to $50-70 billion, surpassing previous estimates by $20 billion. The company has also partnered with Nvidia to co-design the GB10 Grace Blackwell Superchip, used in Nvidia’s DGX Spark, a cutting-edge AI supercomputer.
For Q4, MediaTek reported $150.2 billion ($4.76 billion) in revenue, an 8.8% increase year-on-year, though net income dipped 3.6%. Despite the challenges, MediaTek’s stock has gained 26% this year, outperforming the market.
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