MediaTek has approved a $5 billion discretionary financing framework to accelerate its expansion into custom AI data center chips. The board approved the plan on July 31, granting the company flexibility to raise capital as customer demand and production needs increase.
The move comes as MediaTek seeks to diversify revenue beyond smartphones. Its mobile chip sales fell 20% year-over-year in the June quarter, pressured by higher component costs and weaker handset demand. The company reported quarterly revenue of NT$152.18 billion (about $4.71 billion), up 1.2% from a year earlier, but net income declined 12.3% to NT$24.6 billion.
CEO Rick Tsai stated during the earnings call: “This flexible framework provides us with the optionality, when needed, to agilely support our long-term growth and large data center opportunities.” The approval does not require immediate use of the full amount; MediaTek can arrange financing when needed for chip development, manufacturing capacity, advanced packaging, memory supplies, and production work tied to customer orders.
MediaTek has expanded its data center capabilities through custom chip design and high-speed connectivity products. In June, it announced services covering advanced chip processes, packaging, memory, interconnects, and rack-level integration — all part of its custom silicon offering for cloud companies building AI infrastructure.
The company raised its 2027 custom AI chip market estimate to $80 billion, up from a prior range of $70–80 billion. It also increased its target market share to 15–20%, from 10–15%. Earlier, MediaTek had doubled its 2026 AI accelerator revenue target to $2 billion. The company now expects its data center AI business to generate over $2 billion in 2026. Its first custom AI chip will enter production in the fourth quarter, with a second product reaching volume production in 2028.
Custom chips allow cloud companies to design processors for specific AI workloads rather than relying solely on standard products. MediaTek provides design services and supporting technology, while customers set performance, power, and system requirements for their data centers.
Tsai noted that global smartphone shipments are expected to decline about 15% in units this year. Industry estimates showed an 11% drop in the second quarter, the weakest June quarter since 2013. Memory shortages have also raised handset prices and reduced demand. MediaTek has started raising prices across parts of its product range to reflect higher supply-chain costs.
Investor reaction was strong: MediaTek shares closed 9.9% higher on the day of the announcement and had gained 148.6% during 2026. The company’s market value reached approximately $176 billion, making it Taiwan’s second-largest listed company.
Leave a Reply