MediaTek reported March revenues up 16% sequentially but down 9% on year at NT$3.22 billion. The company also holds a conservative outlook for second quarter revenues, with sales expected to remain flat.

MediaTek had accumulated monthly revenues of NT$9.01 billion for the first quarter of this year, a drop of 6% on quarter and 5.85% on year.

However, market observers anticipate MediaTek should enjoy higher gross margins from the 44.3% it recorded in the fourth quarter of 2004, as foundry costs should be lower and average selling prices (ASPs) have remained stable.

A report earlier this year cited source at IC design houses as saying foundries such as Taiwan Semiconductor Manufacturing Company (TSMC) and Powerchip Semiconductor Corporation (PSC) have offered price reductions from year-end 2004.

Although some investors have voiced concerns that MediaTek is shipping more handset chips, which tend to have lower margins, a source at the company noted that only 10-15% of the company?s first quarter shipments were for handset chips, while a high-proportion of those shipments were for GPRS chips, whose margins are well over 40%.

However, MediaTek has also posted a conservative outlook for second quarter revenues, indicating April orders will be flat on March. Also constraining sales growth this quarter will be seasonal effects in the PC segment and the long holiday during early May in China.

More information available at digitimes.com