MediaTek Earnings: Smartphone Recovery and AI Marketing Buy Time for Long-Term Drivers

We retain our fair value estimate on MediaTek at TWD 1,400 per share after rolling our model without changes to our underlying view. We find MediaTek undervalued for its continued ability to defend prices and take market share in the premium smartphone segment at the same time. Its long-term drivers in automotive, enterprise-use chips are more visible, with management signaling new categories of products to be shipped in late 2025. The key upside to our forecasts is MediaTek selling more expensive mobile chips due to demand induced by artificial intelligence, or AI, computing.