MediaTek Cuts Smartphone Shipments, Banks on TSMC Capacity for AI ASIC Growth

MediaTek cut its 2026 smartphone chip shipment forecast twice as prices for memory and other components surged and end-market demand weakened. To offset the smartphone market downturn, the company is actively transforming its business and shifting its second-half growth focus to custom AI chips, or ASICs. The strategy will be a key test of whether MediaTek can reduce its reliance on a single consumer electronics category and successfully become a platform-based IC design company.

MediaTek has secured a place in the AI ASIC supply chains of major U.S. companies including Google and aims to expand the business to several billion dollars in revenue in 2026. However, TSMC’s advanced process capacity, including 3-nanometer production, and its CoWoS advanced packaging capacity remain tight as second-half orders ramp up. Whether MediaTek can secure sufficient TSMC wafer allocations in the third quarter will directly determine the timing of volume shipments for its AI ASICs and next-generation flagship chips.