MediaTek approves $5B budget to chase AI data center chip market
What's the deal? MediaTekDealroom has a profile for this one. Try Dealroom → has approved US$3.24B discretionary financing budget to accelerate development of AI application-specific integrated circuits (ASICs) for data centers. The move is aimed at expanding its custom AI chip business and cutting its reliance on smartphone chip sales.
Why now? The company's mobile phone segment revenue fell 20% year-on-year in Q2 2026, which MediaTek blamed on rising bill-of-materials costs from an AI-driven component shortage. Chief executive officer Rick TsaiDealroom has a profile for this one. Try Dealroom → said the funding framework provides "the flexibility to support long-term growth."
What's the endgame? MediaTek raised its 2027 addressable market estimate for custom AI chips to $80 billion, up from an earlier $70-80 billion, and lifted its target market share to 15-20% from 10-15%. It projects its AI data center chip business will generate more than $2 billion in revenue in 2026.
What's next? Tsai confirmed MediaTek's first AI accelerator ASIC is expected to enter production in Q4 2026, with a second-generation chip planned for volume production in early 2028.
The signal: Rival QualcommDealroom has a profile for this one. Try Dealroom → is also pushing into AI data centers, targeting $5 billion in revenue from the segment by fiscal 2027 and $15 billion by 2029. As suppliers prioritise AI demand, smartphones are feeling the squeeze — Counterpoint ResearchDealroom has a profile for this one. Try Dealroom → estimates global shipments fell 11% year-on-year in Q2 2026, the lowest second-quarter level since 2013.
Read more: The Mainstream
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