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Analysts Raise MediaTek Price Target on Strong AI Accelerator Growth
Electronic Technology · Semiconductors · economic_daily · 2026-11-02
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MediaTek sees a significant boost from its AI accelerator business and new client wins, prompting analysts to upgrade profit forecasts and price targets.
What Happened
AI Revenue Growth: MediaTek reported strong third-quarter results and increased its fourth-quarter AI revenue contribution forecast from $2 billion to $2.5 billion. Analysts expect the company to see a 30% quarter-over-quarter revenue increase, driven by the mass production of AI accelerators.
Market Share and Client Wins: The company has raised its AI ASIC market share projection to 20% and continues to secure orders from cloud service providers. Despite technical challenges with yields and substrates for next-generation accelerators, the firm remains on track for a 2028 tape-out.
Advanced Packaging Strategy: MediaTek is collaborating with IDM and substrate suppliers to secure production capacity for advanced packaging. Analysts maintain their long-term outlook, projecting that AI accelerator revenue will reach $32 billion by 2028.
Profitability Outlook: Although AI accelerators carry lower margins than the company average, their high selling prices and effective cost management are expected to drive operating margins higher. Analysts anticipate a turning point in the fourth quarter, with operating margins projected to exceed 20% by 2027.