Ariel Investments LLC - Ariel Global Fund on MediaTek Inc.
Thesis
MediaTek is expanding its role as a supplier to Google's cloud and AI infrastructure. Stronger expectations for Tensor Processing Unit adoption support a steeper revenue ramp, while its profitable cloud ASIC business provides operating leverage. Potential wins with other hyperscalers and strength in smartphones and AI-enabled devices provide additional upside.
“potential wins with other hyperscalers add further upside”
Key risks
- TPU adoption or hyperscaler wins may develop more slowly than expected
- Smartphone demand may weaken