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Insights Tag: Automotive
Meet Counterpoint Research at Japan Mobility Show 2023
Counterpoint Research is attending Japan Mobility Show from 25th to 28th October 2023
Our Senior Analyst, Soumen Mandal will be attending the Japan Mobility Show 2023 at Tokyo Big Sight, Tokyo, Japan. You can schedule a meeting with him to discuss the latest trends in the technology, media and telecommunication sector and understand how our leading research and services can help your business.
When: 25th to 28th October 2023
Where: Tokyo Big Sight, Tokyo, Japan
About the Japan Mobility Show:
The inaugural edition of Japan Mobility Show will feature the participation not only of the automotive industry but also of established companies and startups from multiple other industries whose activities extend beyond mobility. A total of 475 enterprises will be participating, far exceeding the 192 companies that took part in the final edition of the Tokyo Motor Show in 2019.
Japan Mobility Show aims to serve as a unique venue for collaboration—a show where exhibitors and visitors can discuss and envision, together, what the future will look like.
Click here (or send us an email at contact@counterpointresearch.com) to schedule a meeting with them.
SE Asia Becomes World’s Hottest EV Market As Asian OEMs Take Pole Position
- SE Asia was the hottest major EV market globally in Q2, growing nearly 10X YoY driven by key countries in Indochina
- BYD took top position in unit sales share followed closely by domestic market favorite Vingroup
- Chinese OEMs advanced the most, underscoring strong demand for lower-tier price segments
Hong Kong, Jakarta, New Delhi, London, Boston, Seoul – September 21, 2023
According to Counterpoint Research’s latest SE Asia Passenger Electric Vehicle Tracker, Q2 2023 battery electric vehicle (BEV) unit sales in the region grew by 894%, driven by strong demand across Thailand, Vietnam, Indonesia, and Malaysia.
Base effects are in play as markets are very early stage, but significant progress is being made with EV share of overall passenger vehicle sales rising to over 6% during the quarter, with key Asian OEMs capitalizing on strong initial demand.
Passenger EV* Unit Sales Share and YoY Growth by Auto Group
“What we’re seeing is just the beginning with SE Asia’s biggest markets starting to scale. It’s happening as government efforts to promote electrification dovetail with a flurry of products coming online that might not be budget, but are a lot more accessible to more buyers in the region,” says Soumen Mandal, Senior Analyst for Automotive. “Vietnam and Thailand are great examples, with automakers introducing lower-priced models targeting the broadest range of consumers.”
“The result has been a big decline in prices over the past year as OEMs like Vinfast and BYD introduced cars with better sticker appeal. Comparing the top 5 best sellers YoY, prices have come down over 20%.”
Chinese OEMs are set to become the biggest beneficiary of SE Asia’s appetite for EVs over the short term, and Thailand will be a hot spot as this new breed of automakers sets up shop in the Kingdom – the region’s auto manufacturing hub; traditional players like Toyota are leaving the door open as they falter in the transition to EVs.
“There’s a big window of opportunity especially for someone like BYD, which has enjoyed a massive home market head start,” notes Ivan Lam, Senior Analyst for Manufacturing. “Scale and end-to-end manufacturing prowess gives it a competitive advantage few EV players can match – affordable cars, robust supply, more frequent product launches. This might not sound exciting in terms of traditional combustion engine vehicles, but in EVs, it’s revolutionary.”
Background
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.
Follow Counterpoint Research
press@counterpointresearch.com
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Meet Counterpoint at IDMC 2023
Counterpoint is attending IDMC on September 13th – September 14th, 2023
Our analysts will be attending the India Display Manufacturing Conference (IDMC), 2023. You can schedule a meeting with them to discuss the latest trends in the technology, media and telecommunications sector and understand how our leading research and services can help your business.
Here is the list of team members attending the event:
- Tarun Pathak – Research Director
- Varun Mishra – Senior Analyst
- Prachir Singh – Senior Analyst
- Varun Gupta – Research Analyst
When: September 13th – September 14th
Where: BIEC, Bengaluru
Register for the event here.
About the event:
At IDMC, thought leaders from across the world will converge to share their insights and perspectives on the sector’s outlook and opportunities. This event will bring together prominent investors, business leaders in the global display industry, and leading Indian corporations.
Additionally, the event will feature an exhibition, unveiling the latest display products and trends, making it a gathering for anyone seeking to stay at the forefront of the industry.
Click here (or send us an email at contact@counterpointresearch.com) to schedule a meeting with them
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China’s EV Makers Face Q2 2023 Domestic Slowdown as Overseas Markets Set to Overtake 10% Milestone
- China’s EV market growth continued to slow, with Q2 2023 EV unit sales seeing a rise of only 37% YoY – lower than the global average
- Strong results from four of China’s big 5 EV makers were offset by a mix of tepid and disappointing results across a range of key manufacturers
- Chinese OEMs look prepped to expand globally, with share of global (ex-China) auto sales set to pass a significant 10% milestone in Q3 2023
- SAIC Group and BYD Auto account for the bulk of exports, with the latter well positioned for long-term growth as it enters Europe in earnest later this year
Beijing, Hong Kong, London, New Delhi, Boston, Seoul – September 8, 2023
According to Counterpoint Research’s latest China Passenger Electric Vehicle Tracker, Q2 2023 battery electric vehicle (BEV) unit sales in the country grew only 37% YoY, lower than the global average of 50%, highlighting a slowdown in domestic growth as the frail Chinese economy impacted demand in the world’s biggest EV market.
BYD Auto and Tesla continued to dominate unfazed, accounting for more than one-third of domestic unit sales. But the market also saw GAC Group establish itself as a solid number three on the back of strong demand for its line of compact Aion sedan and hatchbacks as it aggressively reduced prices in the midst of a price war.
“We’re also seeing strong numbers from several mid-sized domestic players that are having success across a broad range of vehicles – from sub-compact city cars through to long-range luxury cruisers. But many automakers are struggling as the market eases,” notes Ethan Qi, Associate Director. “China’s a big market but there’s also a lot of small carmakers, so any kind of slowdown and you’re probably going to see some consolidation as weaker companies inevitably exit.”
China Passenger EV* Unit Sales Share and YoY Growth by Auto Group
Many Chinese OEMs are looking externally for growth and are gaining a foothold in markets like Europe and Asia. “If you exclude China, by far the biggest market for EVs globally is Western Europe. It’s not China, but growth has started to accelerate this quarter,” says Qi. “Right now it’s all about MG, the SAIC-owned British badge that’s spearheading Chinese growth in the region with its compact cars and SUVs. It’s filling a vacuum in the affordable segment, where traditional names are struggling to supply consumers with EVs in that $20,000 – $40,000 sweet spot. This is where Chinese brands have a lot of depth.”
Chinese OEM Overseas EV Sales and Market Share
BYD Auto is enjoying success across a diverse group of markets mainly in Asia, but it is gearing up for Europe growth with new models to be shipped into the region later this year.
Ivan Lam, Senior Analyst, Manufacturing, notes, “BYD has all the classic advantages of a Chinese tech company including scale and proximity to the supply chain. What makes them stand out even more is their vertical integration right through to the battery. This helps them dominate at home. And as they expand production outside China, it will also make them a serious threat to global competitors.”
“I wouldn’t be surprised if they’re able to grab a lot of share quickly because of the latent demand for affordable EVs in Europe. And a planned 2025 factory will only bolster their advantage over the long term,” muses Lam. “The maxim ‘If you can make it in China, you can make it anywhere’ really does apply here.”
Background
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.
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US BEV Sales Up 57% in Q2 2023, Rising Inventories Pose Challenge
- Every second BEV sold in the US in Q2 2023 was a Tesla.
- BEV sales by foreign brands more than doubled YoY to 81,000 units.
- Annual BEV sales are expected to exceed 1 million units by the end of 2023.
New Delhi, London, San Diego, Buenos Aires, Hong Kong, Beijing, Seoul – September 4, 2023
US passenger battery electric vehicle* (BEV) sales grew 57% YoY in Q2 2023, according to the latest research from Counterpoint’s US Passenger Electric Vehicle Model Sales Tracker. The US maintained its status as the second-largest BEV market, a position it achieved by surpassing Germany in the previous quarter. BEVs constituted more than 7% of total passenger vehicle sales in the US in Q2. During H1 2023, Tesla’s tally exceeded the combined BEV sales of the next 14 automotive groups by 122,000 vehicles.
Commenting on the market dynamics, Research Analyst Abhik Mukherjee said, “Building on the existing momentum, the US automotive industry maintained its upward trajectory in Q2 2023. Total passenger vehicle sales surged by over 16% YoY. BEV sales are on the rise, driven by the EV tax credit and increasing environmental awareness among consumers. US-based brands like Tesla, GM, Ford, Rivian, Lucid and Karma captured nearly three-quarters of total BEV sales. Among foreign-origin brands operating in the US, European manufacturers claimed the largest market share, followed by South Korean and Japanese brands. Total BEV sales by brands of foreign origin, such as Hyundai Kia, Volkswagen Group, Mercedes-Benz, BMW, Volvo, Toyota, Subaru, Jaguar and Land Rover, jumped by more than 100% YoY to nearly 81,000 units.”
The top five best-selling BEV models in the US accounted for more than 60% of the market’s overall BEV sales during the quarter. Tesla’s Model Y and Model 3 together accounted for 55% of the BEV market. The Rivian R1T emerged as the third best-selling model during Q2 2023. This is the first time a Rivian model has secured a position in the top five since the introduction of its first vehicle in late 2021.
Commenting on the market outlook, Research Director Jeff Fieldhack said, “If the current growth trajectory continues, annual BEV sales in the US will exceed 1 million units by the end of 2023. However, rising inventories are expected to become a problem for automakers. EV-related investments by auto OEMs are rapidly growing across the North American continent. These investments, which cover EV production ramps, components and battery, and charging infrastructure, have already crossed $100 billion. Most EV brands are preparing to launch new models or update existing models from 2024 onwards. To address the inventory challenges, OEMs will either need to reduce prices or limit production, both of which will hurt their financial performance.”
*Sales refer to wholesale figures, i.e. deliveries from factories by the respective brand/company.
The comprehensive and in-depth ‘US Passenger Electric Vehicle Sales Tracker, Q1 2018-Q2 2023’ is now available for purchase at report.counterpointresearch.com.
Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.
Background
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.
Follow Counterpoint Research
press(at)counterpointresearch.com
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HERE Maintains Lead in Map Data Licensing for In-car Navigation
- Europe’s in-car navigation sales saw a modest growth of 5% YoY in 2022.
- HERE continued to lead the European built-in car navigation map data licensing market in 2022.
- Google’s automotive foray challenges the position of players like HERE and TomTom.
- New players like Mapbox and What3word are bringing unique aspects to in-vehicle navigation.
Beijing, New Delhi, London, San Diego, Buenos Aires, Hong Kong, Seoul – September 1, 2023
European in-car navigation sales saw a modest growth of 5% YoY in 2022, according to the latest research from Counterpoint’s Global Embedded Navigation Sales Tracker. The increasing adoption of electric vehicles (EVs) and advanced driver assistance (ADAS) features is driving the growth of built-in navigation systems in cars. Navigation helps EV drivers plan the optimal route by considering battery range and charging station locations. Besides, navigation helps ensure safety by giving drivers information about the weather, speed limits and traffic conditions.
In terms of sales volume, Germany, the UK and France are the leading countries in built-in car navigation. But in terms of the share of such cars in total car sales, Norway leads, followed by the Netherlands and Germany. Volkswagen Group, Stellantis and Renault-Nissan are the top three automotive groups in terms of built-in car navigation sales. EV players like Tesla, NIO and Xpeng offer navigation on all models.
Commenting on the market dynamics, Research Analyst Mohit Sharma said, “Almost 50% of cars sold in 2022 had built-in navigation. HERE is leading the European market in terms of licensing its map data.”
HERE, with a strong presence in the automotive industry, has a 66% share in Europe’s built-in car navigation map data market. The company licenses its map data to other companies to build applications and services.
HERE offers its navigation services to OEMs like BMW and Mercedes. Chinese brands such as FAW Hongqi and SAIC, which are expanding their sales into Europe, have partnered with HERE for navigation data.
Commenting on HERE’s performance, Vice President Peter Richardson said, “HERE is well-positioned within the automotive sector by working in partnership with automakers to address their technological challenges, like those related to EVs and adoption of autonomous driving. HERE is one of the enablers for automakers in launching new technologies like Level 3 autonomous driving.”
TomTom is in the second position in the European market with a 22.1% share. Last year marked the company’s second pivotal year after 2009, when it decided to sell its navigation services to automakers directly after the decline of its GPS standalone device business. In 2022, the company announced a new map platform besides rebranding itself.
TomTom has long-standing partnerships with Stellantis, Renault and other car manufacturers. The company has also signed a fresh deal with Hyundai Motor Group for licensing its map data and traffic services to all brands of the group, including Genesis for the European market. Another notable win for TomTom is a partnership with the Foxconn-led MIH Consortium to increase its presence in next-generation smart mobility vehicles.
Google’s share in the in-car navigation map data licensing market continues to increase, reaching 7% in 2022. Sharma added, “Google’s entry into in-vehicle navigation services has enlivened the competition in the European market. For years, the market has seen the duopoly of legacy players HERE and TomTom. Google is trying to catch up with traditional navigation providers as it continues to expand its automotive offerings like EV routing and HD maps.”
Further, new players like Mapbox and What3words are bringing unique aspects to in-vehicle navigation.
Source: Global In-Car Navigation Tracker, Q1 2021- Q4 2022
Note: The above chart has been updated to represent the competitive landscape of the extent of maps data licensing across several cars in Europe. Going further will we do a comparative analysis of the navigation software and services landscape with tier 1&2 suppliers supplying or integrating the map data with navigation software and services as part of our Global Smart Automotive Maps, Navigation and Services Tracker across geographies.
Commenting on the market forecast, Vice President Neil Shah said, “The in-car navigation market is expected to see a growth of 10%-15% in 2023 as most automakers will look to comply with new ISA regulation while moving towards electrification and more intelligent driving.” He further added, “Maps will play a crucial role in achieving highly automated driving (Level 4-Level 5) and we will see new collaborations flourishing not only between OEMs and map players but also between self-driving chip manufacturers like Qualcomm and map players.”
We will do a separate insight release on navigation software to provide more clarity on the navigation software and services.
The comprehensive and in-depth ‘Global In-Car Navigation Tracker, Q1 2021-Q4 2022’ is now available for purchase at report.counterpointresearch.com.
Feel free to reach us at press(at)counterpointresearch.com for questions regarding our latest research and insights.
Background
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.
Contact:
Counterpoint Research
press(at)counterpointresearch.com
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Global Electric Vehicle Market Share, Q3 2021 – Q2 2023
Global Passenger Electric Vehicle Market Share, Q3 2021 – Q2 2023
Published date: August 31, 2023
This page depicts our quarterly data for global electric vehicle sales market share from Q3 2021 to Q2 2023.
| Global Passenger Electric Vehicle* Market Share, Q3 2021 – Q2 2023 | ||||||||
| Auto Group | Q3 2021 | Q4 2021 | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 |
| Tesla | 20% | 19% | 21% | 16% | 17% | 17% | 22% | 20% |
| BYD Auto | 9% | 9% | 10% | 12% | 13% | 15% | 14% | 15% |
| Volkswagen Group | 10% | 10% | 7% | 7% | 7% | 8% | 7% | 7% |
| Others | 60% | 62% | 62% | 65% | 63% | 60% | 57% | 58% |
Source: Global Passenger Electric Vehicle Model Sales Tracker: Q1 2018 – Q2 2023
DOWNLOAD:
(Use the buttons below to download the complete chart)
Global electric vehicle market highlights:
- BEV sales during Q2 2023 grew over 50% YoY.
- One in every 10 cars sold during Q2 2023 was a pure battery electric vehicle (BEV).
- China remained the leader in global BEV sales followed by USA and Germany.
- BEV sales in the USA grew by almost 57% YoY, the highest among the top 3 EV markets.
- Tesla Model Y retained its title as the ‘best-selling’ passenger car globally.
- With the present growth trajectory, total BEV sales are expected to reach over 10 million units by the end of 2023.
Top Electric Vehicle Brands highlights:
Tesla: Tesla sales soared by 83% YoY during Q2 2023. Tesla Model Y accounted for 64% of Tesla’s global sales. Model Y retained its title as the ‘best-selling’ passenger car model globally.
BYD Auto: During Q2 2023, BYD Auto’s BEV sales grew by 96% YoY, faster than Tesla. BYD Yuan Plus (or Atto 3) was the best-selling BYD model followed by BYD Dolphin and BYD Seagull. BYD Seagull was introduced in April 2023 during the Shanghai auto expo. BYD Seagull also ranked #9 among the top 10 best-selling BEV models globally. BYD exported over 35,000 EVs during Q2 2023. Almost two-thirds of its exported BEVs were sold in Thailand, Israel and Australia.
Volkswagen Group: BEV sales of VW group grew by 48% YoY during Q2 2023. VW ID.4, Audi Q4-etron and VW ID.3 are the top 3 best-selling models of the group, accounting for nearly 50% of the group’s total BEV sales.
* Our present analysis takes Pure Battery EVs (BEVs) into account. We have removed Plug-in Hybrid EVs (PHEVs) from our analysis to avoid confusion.
For our detailed research on the global EV sales market in Q2 2023, click here.
For a more detailed electric vehicle model sales tracker, click below:
Global Passenger Electric Vehicle Model Sales Tracker: Q1 2018 – Q2 2023
This report tracks the global passenger vehicle sales* by brand and by model across 23 regions (China, USA, Germany, UK, France, Spain, Japan, India, Italy, South Korea, Thailand, Indonesia, Vietnam, Brazil, Argentina, Russia, Malaysia, Philippines, Singapore, ROE, LATAM, MEA and Oceania) quarterly. The report will help to understand regional trends, brand dynamics and type of EV penetration. The period covered in this report is from Q1 2018 to Q2 2023.
*Sales here refers to wholesale figures, i.e., deliveries out of factories by respective brands/companies.
*Under electric vehicles, the report only considers battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). Hybrid electric vehicles and fuel cell vehicles (FCVs) are not included.
Table of Contents:
• Definition
• Pivot Table
• Flatfile
Note: Numbers based on passenger vehicles only. For EVs, we consider only BEVs and PHEVs. Hybrid EVs and fuel cell vehicles (FCVs) are not included in this study.
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Ford Takes Leaf Out of Tesla Book, Moves Deeper into Services
Ford continues to demonstrate its understanding of the opportunity that it needs to address with the migration of its business model to subscription and the recruitment of Peter Stern from Apple to run its Integrated Services division.
The company is taking a leaf out of Tesla’s book and will offer its BlueCruise advanced driver assistance products on a subscription-only basis. This is not as counterintuitive as it sounds as new car buyers will be able to purchase the service for three years with an upfront payment of $2,100. Since it will be marketed as an option in the usual way, it is unlikely to change the purchase experience of new car buyers very much. Furthermore, as so many vehicles are purchased on leasing schemes, there is a good chance that the buyer of the new vehicle would have changed the vehicle before the three-year period has elapsed.
This is how Ford seeks to introduce users to the idea of subscription, but there remain some features that will never work on a subscription basis. Two of these are Mercedes’ idea of asking customers to pay $1,200 per year to improve the driving performance of their EVs and BMW’s idea of asking customers to pay $180 per year for heated seats. This is a very common strategy employed by consumer electronics companies and has also been used to good effect by Tesla.
However, the vehicle-buying public has been paying one-off fees for hardware options for decades and I suspect that there is going to be a lot of resistance to paying $15 a month to keep one’s bottom warm in winter. Hence, the right approach is to charge for the options exactly as they have been for years and to offer subscriptions for services rather than products.
Advanced driver assistance sits right in the middle as it requires extra hardware to be present but is almost entirely driven by software which will need constant updating. Furthermore, much like a chauffeur that needs to be paid on a monthly basis, it is not a very large conceptual jump to be seen as a service rather than a hardware option.
Tesla has already prepared the market for this and so Ford has a pretty good chance of winning adoption with this model. Ford has also recruited Peter Stern who spent six years at Apple (Time Warner before that) running its subscription services.
The idea here is obviously to ensure that when it comes to Digital Life in the vehicle, Ford is ready with an appealing option for each activity with which the user will engage. This will go from a media consumption offering to transport-related services such as smart parking, which saves the user from driving round and round looking for a parking spot.
The market for digital services in the vehicle could be very large indeed especially as consumer spending on vehicle transportation declines over the next 20 years. Ford is again doing the right thing in attempting to address this market, but it will need to ensure that its user experience remains relevant in the vehicle as Apple and Google will be only too happy to sell their services and those of third parties via their user experiences instead.
This is the key challenge that all OEMs face over the next 20 years and Ford remains one of the few automakers outside of Tesla that appear to understand what is happening to their industry and seem to be addressing it in the right way.
(This is a version of a blog that first appeared on Radio Free Mobile. All views expressed are Richard’s own.)
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MediaTek to Focus on Automotive, Edge AI for Growth
- The company saw a slight growth in Q2 revenues due to the improving demand for 5G SoCs.
- Inventory came down to a relatively normal level.
- MediaTek and NVIDIA have tied up to develop a full-scale product roadmap for the automotive industry.
- Significant revenues are expected to be seen for MediaTek’s auto and custom ASIC segments from 2026.
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MediaTek’s revenues were slightly up sequentially but down 43% annually in Q2 2023. Inventory has gradually come down to a relatively normal level, but the demand for smartphones will remain slow due to the global macroeconomic situation and the refurbished smartphone market. Against this backdrop, MediaTek is diversifying its portfolio by focusing on the auto, smart edge and custom ASIC segments. The company is estimated to take over two years to get material revenues from these segments.
AI and ASIC Opportunity
CEO: “As for ASIC, we recently see growing enterprise ASIC business opportunities in AI and datacenter markets. With our strong IP and SoC integration capabilities, we aim to continue to grow this business in the future.”
Parv Sharma’s analyst take: “With the growth in generative AI, the demand for edge AI processing has accelerated. Being one of the top players in edge devices, MediaTek is well-positioned to benefit from this shift. The company will focus on winning enterprise ASIC projects but catching up with major players like Broadcom and Marvell will take time, as customers typically work with existing suppliers for repeat projects.”
Growing focus on auto and partnership with NVIDIA
CEO: “We’re very excited about the recently announced partnership between MediaTek and NVIDIA to develop a full-scale product roadmap for the automotive industry. We believe our industry-leading low-power processors and 5G, WiFi connectivity solutions, combined with NVIDIA’s strong capability in software and AI cloud, will help us become highly competitive in the future connected software-defined vehicles market and shorten our time to market to accelerate our growth.”
Shivani Parashar’s analyst take: “MediaTek launched Dimensity Auto to focus on cockpit and connectivity solutions. With its partnership with NVIDIA, the company aims to develop a full-scale product roadmap for the automotive industry. Auto design cycles are long so it will take some time (2026-2027) for the company to increase revenues from this segment. Overall, we can say the auto segment will become a long-term revenue growth driver for MediaTek.”
Customer and channel inventories come down
CEO: “We observed that customer and channel inventories across major applications have gradually reduced to a relatively normal level. Recent demand from our customers has shown certain level of stabilization. However, our customers are still managing their inventory cautiously as global consumer electronics end market demand remains soft. For the near-term, we expect our business to gradually improve in the second half of the year”
Shivani Parashar’s analyst take: “According to our supply chain checks, inventory levels are coming down and will get back to normal in the second half of 2023. OEMs will start restocking but will be cautious due to weak consumer demand and global macroeconomic conditions.”
Result summary
- Slight improvement in revenues: MediaTek recorded $3.2 billion in revenues in Q2 2023, a slight increase of 2% QoQ but a decrease of 43% YoY due to the weak global demand for end products and the second-hand smartphone market. Customer and channel inventories across major applications have come down to a relatively normal level.
- Maintained mobile segment revenue due to 5G SoCs: The mobile phone segment contributed 46% to the company’s revenue in Q2 2023, which declined by 51% YoY and increased by 2% QoQ. The demand for 5G SoCs improved during the quarter. The new flagship Dimensity SoC will be launched in the coming month.
- New opportunities for smart edge: The smart edge segment contributed 47% to the company’s revenue in Q2, growing 2% sequentially. The demand for connectivity remained stable in the quarter. Business opportunities are growing for the ASIC segment.
- Price discipline: MediaTek will focus on maintaining gross margin, following price discipline at a time of uncertainty in the global semiconductor industry.
- Favorable guidance: MediaTek guided Q3 revenues in the range of $3.3 to $3.5 billion, growing 4%-11% sequentially. Gross margins are expected to be around 47% while the operating expense ratio is expected to be around 32% in Q2 2023. The smartphone, connectivity and PMIC segments will see revenue growth. The smart TV segment will witness declining revenues in the third quarter due to excess inventory.
- Auto segment is picking up: Automotive will contribute $200 to $300 million to MediaTek’s revenue in 2023. More significant revenue can be seen from 2026. The current auto design pipeline revenue for MediaTek is over $1 billion.
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