The chief executive of Taiwan’s leading chip design firm MediaTek expressed unwavering confidence Thursday in the continuing artificial intelligence surge, stating that data center demand is picking up speed.
Taiwan-based technology companies including MediaTek and TSMC, the globe’s biggest contract semiconductor manufacturer, have seen business boom due to AI growth, even as some market observers worry that rapid tech industry investment may not produce adequate returns.
During Thursday’s earnings call, MediaTek CEO Rick Tsai highlighted particularly robust demand momentum for AI data centers.
“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 projected that MediaTek anticipates generating multiple billions of dollars in revenue from its AI accelerator ASIC chips by 2027.
The data center ASIC chip market is now projected to reach $70 billion to $80 billion by 2027, he noted, an increase from earlier projections of $50 billion to $70 billion.
MediaTek purchases from TSMC, which announced earlier this month that its first-quarter earnings climbed 58% to a new record, surpassing analyst predictions.
Tsai’s optimistic statements join similar positive commentary from other companies regarding artificial intelligence.
Alphabet exceeded Wall Street’s quarterly revenue expectations Wednesday, as business investment in AI produced the strongest reported growth quarter for its cloud division to date.
Samsung Electronics of South Korea, the world’s top memory chip producer, announced Thursday that first-quarter operating earnings jumped eight times to a record level, supported by increased chip pricing as AI growth created supply shortages.
MediaTek ranks as Taiwan’s third most valuable publicly traded company with a market value of $131 billion.
Thursday’s earnings showed MediaTek’s first-quarter revenue at T$149.15 billion ($4.71 billion), down 2.7% compared to the previous year, while net earnings declined 17.4% to T$24.38 billion.
The company attributed the revenue decrease to weakness in its mobile phone division, which counteracted revenue increases for Smart Edge Platforms, including AI server chips.
MediaTek stock has jumped 83% this year, significantly outpacing the benchmark index’s 34% gain. Shares finished 1.4% higher Thursday before earnings were announced.
