Key Call: MediaTek Inc.
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UBS has added MediaTek to its Asia-Pacific Key Call list, dramatically raising its TPU ASIC sales forecasts to $12 billion in 2027 and $20.4 billion in 2028, up from previous estimates of $8 billion and $13 to $14 billion, respectively. This revision reflects insights from Google Cloud Next 26, suggesting MediaTek will supply high-volume training chips for Google's TPU 8t, a significant upgrade from earlier expectations of light inference workloads.
UBS now estimates 2027 TPU shipments will reach 3 million units, up from 2 million, corresponding to a 29% chipset market share. Strong operational leverage is expected to boost cloud ASIC operating margins from the high 20% to 30% range up to 36% to 37%. TPU contributions are projected to add TWD 72 and TWD 127 to earnings per share in 2027 and 2028, respectively.
Looking ahead, the v9 TPU is slated for mass production by late 2027 or early 2028. MediaTek's v9 design is expected to closely mirror Broadcom's, utilizing four N2 TPU dies. Furthermore, MediaTek is developing 336G SerDes technology and could secure a position in the v10 ASIC generation.
UBS reiterates a Buy rating, increasing the target price from TWD 2,250 to TWD 3,400 based on 25 times 2027 estimated earnings. The firm raised its long-term earnings compound annual growth rate assumption from 20% to 25%, reflecting the substantially improved profitability and scale of the ASIC business.