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Citi Reaffirms Buy Rating on MediaTek, Citing AI ASIC Project Progress
Electronic Technology · Semiconductors · economic_daily · 2026-10-22
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Citi analysts maintain a Buy rating and 6,800 TWD target on MediaTek, noting that key AI ASIC projects are back on track and forecasting strong Q4 growth.
What Happened
Operational Outlook: Despite recent stock volatility linked to TPU development concerns, Citi reports that MediaTek’s key AI ASIC projects are back on track. The firm anticipates a robust 30% quarter-over-quarter revenue growth in Q4, driven by consumer electronics demand and pricing power.
Financial Performance: MediaTek achieved record-breaking Q3 revenue, outperforming market expectations due to improved product mix and market share gains. Citi expects the company's Q3 gross and operating margins to align with the midpoint of its guidance, supported by solid operating leverage.
Technical Challenges: While acknowledging potential yield risks for the TPU v9 project using EMIB-T packaging, Citi remains optimistic about the company's long-term prospects. The extension of the v8 product lifecycle and the secured participation in the v10 project provide clear revenue visibility through 2029.
Earnings Forecast: Citi highlights that the AI ASIC business will begin contributing significantly to revenue starting in Q4, fueling high-speed profit growth over the next two years. Consequently, the firm has raised its EPS estimates for 2024, 2027, and 2028, reflecting confidence in MediaTek's sustained growth trajectory.