MediaTek Earnings: Great Period With Smartphone and Enterprise Customers Willing to Pay for AI

We retain our fair value estimate for MediaTek of TWD 1,400 per share after slightly revising up 2024 numbers to account for updated guidance and first-quarter results, with no change to our long-term view. MediaTek’s share price is attractive, as we think the market underestimates customers’ willingness to pay a premium for chips with topnotch artificial intelligence features. In the long term, the know-how in AI on smartphones may be partially replicated on enterprise AI chips as the need for power efficiency is the same, which may pose upside potential to our base case.