JPMorgan on MediaTek: Nvidia and Alphabet Convertible Bond Participation Bolsters Confidence in Custom ASIC Capabilities
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JPMorgan maintains Overweight on MediaTek (2454.TW) with a June 2027 target price of NT$5,600 versus NT$4,315 on September 1, 2026. MediaTek priced a US$3.9 billion offshore convertible bond in which Nvidia itself invested US$3.5 billion, alongside Alphabet and leading institutional investors. Under the expanded partnership, MediaTek will adopt Nvidia's NVLink Fusion platform to integrate custom XPUs into NVLink-connected rack-scale AI factories, while continuing joint development of multi-generation DGX Spark and RTX Spark PC chips and AI-defined automotive platforms pairing Dimensity Auto with Nvidia DRIVE AGX. JPMorgan notes this is Nvidia's second-largest semiconductor investment after Intel and its largest outside the United States, following selective stakes in Marvell, Lumentum, Coherent, Corning and Synopsys—an endorsement that should help MediaTek win more custom ASIC projects. NVLink Fusion is unlikely to feature in Google TPU Super Pods, yet remains optional for MediaTek's ASIC clients pursuing semi-custom rack designs, strengthening its hand with emerging hyperscalers and AI labs. Edge AI cooperation acts as a protective call option if compute shifts on-device, and equity dilution at the conversion price stays below 2%. JPMorgan remains very confident in ASIC revenue growth through 2030, expecting positive share reaction to stronger TPU momentum.