XMind

MediaTek 09Q1 outlook

1. 08Q4 Revenue profile

   1. Revenue

      1. QoQ -26.4%

         1. overall product line sales decline

      2. YoY quarter +1.4%

      3. YoY yeal +12.5%

   2. ASP

      1. rise

      2. high-end product mix rise

   3. GM

      1. 54.5%

         1. QoQ +0.2%

            1. USD/TWD appreciation

         2. YoY -0.3%

         3. YoY year -2.6%

   4. OP Expense GAAP

      1. Seasonal issue

         1. year end expense settlement

      2. 6.521B

         1. QoQ -14%

         2. YoY +39.4%

         3. YoY year +98.8%

      3. due the ADI expense

      4. Royalty expense settlement on Q4

      5. 5.0B on Q3 was reasonable level

   5. Product mix

      1. Handset

         1. 2008:60~65%

            1. bit growth to 07Q4

         2. 2009: 65~70%

      2. ODD

         1. 2008: 15~25%

         2. 2009: decline 5%

      3. DTV

         1. 2008:5~10%

         2. 2009: flat

2. Dividend

   1. Pay-out ratio

      1. 08':58%

      2. 07':64%

      3. 09': Higher than ever

3. 09Q1 outlook

   1. Revenue

      1. Decline 8~16%

         1. interior city demand on China brand

         2. Visibility only 2~3 weeks

      2. Conservative customer inventory built-up after vacation

   2. GM%

      1. flat or bit increase

      2. USD/TWD appreciation

   3. OP expense

      1. cut expense 4.5B~4.7B

         1. non-GAAP

      2. To postpone project

      3. To cut engineering expense

      4. To cut overseas (ADI) expanse

      5. Foundry/Assembly cost squeeze

   4. Inventory

      1. 08Q4 to 09Q1 conservative on inventory built up

      2. 5.5B

      3. 70~80 day

      4. Push wafer to Q1

      5. SFAS article No.10 to GM impact less 1% on 07F

         1. it's minor impact

4. Customer activity

   1. Q408

      1. Extremely pessimistic

      2. Customer don't want to built inventory

   2. Q109

      1. Sales performance on new year is okay

      2. Customer pull-in inventory

      3. But still keep conservative inventory built-up

5. Product line status

   1. Handset

      1. TDS-CDMA

         1. 65nm

            1. 2 chip solution

            2. 大唐

         2. Volume production

      2. WCDMA

         1. 65nm

            1. Delay to 2H09

         2. focus on current customer(China)

      3. SoC solution

         1. BB+RF SoC

            1. 2H09 production

               1. MT6253

               2. 110nm UMC

            2. DBB+ABB+RF Tx+PWM

         2. more feature to ULC2

      4. Smartphone

         1. OS: Windows Mobile

            1. 2H09 production

            2. Depends on customer schedule

            3. MT6516 on 65nm tsmc

            4. MT6516 WVGA / 5.0M

         2. Others OS

            1. On schedule

      5. 2/3G market

         1. China

            1. 聯想、天宇朗通、中興、華為

         2. Global operator

            1. '09F Worldwide Growth -10%

            2. Still driven by China OEM

            3. Vodafone/Orange

            4. field test/qualification on-going

            5. Shipment ratio :

               1. '08:30-35%

               2. 09F: 35-40%

         3. Netbook data modem

            1. TDS-CDMA

            2. Easy to adapt

      6. Shipment

         1. 70% China

            1. 09Q1

               1. Good sales around New year

               2. good inventory control

               3. China policy: 家電下鄉

               4. Good performance

         2. 30% Emerging

            1. Depends on USD currency

         3. less decline compare to ODD,DTV

         4. India

            1. share less 10%

         5. Shipment Volume

            1. 2007 : 150M

            2. 2008 : 220M

            3. 09F : 250M YoY 13.64%(Citi)

            4. 09F: 283M YoY 28.7% (Q109 60M) (unknown)

         6. China GDP prediction

            1. 07 : 11.4%

            2. 08: 9.0%

            3. 09F : IMF 7.5%, JPMorgen 5.5%, 中國科學院 8.3%

      7. Revenue contribution

         1. Still major on 2.5G

            1. Foundry source

               1. 2.5G 6226/6227 in UMC

               2. 2.5G 6225 in tsmc

         2. TDS-CDMA/WCDMA less 5% on 09f

            1. Ramp on 2010

      8. ASP

         1. Add feature

            1. high performance ISP support

            2. High process capability

         2. Product mix

         3. Chip cost reduction

   2. ODD

      1. BD

         1. PC driver

            1. Korea

            2. Taiwan

            3. mass production

               1. Major on BD ROM/RW

               2. SoC

         2. Player

            1. North Am

               1. Good sales on Xmas

               2. Customer Pull-in

            2. Two chip (back end+front end)

            3. SoC on 2H09

   3. DTV

      1. Funai patent 695 inactive, ITC withdraw patent 074 judgement, Vizio filed Antitrust lawsuit to Funai on 2/16, NO legal issue

      2. Quantity DTV:Handset 50:50

      3. guest poor Margin, around the break even

      4. Market share 17.1%, major on tsmc

      5. ATSC,DVB-T