TAIPEI, April 30 (Reuters) – The CEO of MediaTek, Taiwan’s top chip design company, on Thursday said he has no doubts about the strength of the artificial intelligence wave, adding that demand for data centres is accelerating.
Taiwanese tech companies like MediaTek and TSMC, the world’s largest contract chipmaker, have reported surging business thanks to the AI boom, despite recent worries among market participants that tech firms’ breakneck spending would not yield sufficient returns.
On an earnings call, MediaTek’s Rick Tsai said demand momentum is particularly strong for AI data centres.
“Everyone can see that demand for data centres continues to grow and if anything to accelerate,” he said. “There is no question that the AI megatrend continues.”
Tsai added that by 2027, MediaTek expects to generate revenue of multiple billions of dollars from its AI accelerator ASIC chips.
The market size for data centre ASIC chips is now estimated to be $70 billion to $80 billion in 2027, he said, up from a previous estimate of $50 billion to $70 billion.
MediaTek is a customer of TSMC, which earlier this month said its first-quarter profit rose 58% to a record high, beating estimates.
Tsai’s comments added to other bullish remarks from companies about AI.
Alphabet topped Wall Street estimates for quarterly revenue on Wednesday, as enterprise spending on AI delivered the best quarter of reported growth for its cloud unit yet.
South Korea’s Samsung Electronics, the world’s largest memory chipmaker, earlier on Thursday said first-quarter operating profit jumped eightfold to a record, underpinned by higher chip prices as the AI boom led to a supply crunch.
MediaTek is the third most valuable company on the Taiwan stock exchange with a market capitalisation of $131 billion.
On Thursday, MediaTek reported first-quarter revenue of T$149.15 billion ($4.71 billion), a 2.7% drop from a year earlier, while net income was down 17.4% to T$24.38 billion.
It blamed the revenue fall on a decline in its mobile phone business which offset revenue growth for Smart Edge Platforms, which includes chips for AI servers.
MediaTek shares have surged 83% this year, outperforming a 34% rise for the benchmark index. The stock closed up 1.4% on Thursday ahead of its earnings release.
($1 = 31.6940 Taiwan dollars)
(Reporting by Ben Blanchard; Additional reporting by Wen-Yee Lee; Editing by Thomas Derpinghaus)
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