Welcome to the Miatek 20 2Q1st Quarter Investors Conference Call. Financial results Now I would like to turn the call over to Ms. Jessie Wang, the Deputy Director of Investor Relations. Ms. Wang, please proceed.
Good afternoon, everyone. Joining us today are Doctor. Rick Tsai, MediaTek's CEO and Mr. David Gu, MediaTek's CFO. Mr.
Gu will report our Q1 results and then Doctor. Cai will provide our prepared remarks. After that, we will open for Q and A. As a reminder, Presentation. Today's presentation will provide forward looking statements based on our current expectations.
The statements are subject to various risks and factors, which may actual results materially different from the statements. The presentation materials supplement non Tipper's financial measures. Earnings distribution will be made in accordance with financial statements based on T1. For details, please refer to the Safe Harbor statement in our presentation slides. Presentation.
In addition, all contents provided in this teleconference are for your reference only, not intended for investment advice. Presentation. Neither MediaTek nor any of the independent providers is responsible for any actions taken in reliance on contents provided in today's call. Now I would like to turn the call to our CFO, Mr. David Guo, for the Q1 financial results.
Thank you, Jessie. Good afternoon, everyone. Now let's start with the 2021 Q1 financial results. The currency here is in NT dollar. Revenue for the quarter was $108,000,000,000 up 12.1% sequentially and Operating expense for the quarter were $28,300,000,000 compared with $27,500,000,000 in the previous quarter and $20,400,000,000 in the same period last year.
Operating income for the quarter was $20,200,000,000 Non T First operating income for the quarter was RMB20.5 billion. Operating margin for the quarter was 18.7 percent increased 2.8 percentage points from the previous quarter and increased 9.2 percentage points Presentation from the year ago quarter. Non T First operating margin for the quarter was 19%. Net income for the quarter was RMB25.8 billion, up 72.3% sequentially and up 300 and presentation. The quarter was 23.9%, increased 8.4 percentage points for the previous quarter and increased 14.4 percentage points from the year ago quarter.
Non T First net profit margin for the quarter was 24.1 percent. EPS for the quarter was NT16.21, Presentation was up from TWD9.35 in the previous quarter and up from TWD3.64 in the same quarter last year. Non T1st EPS for the quarter was RMB16.38 A reconciliation table for our T1st and non GAAP financial measures is attached in our press release for your reference. And that concludes my comments. Thank you.
Thank you, David. Presentation. And now I'd like to turn the call to our CEO, Doctor. Rick Tai for prepared remarks.
Good afternoon, Everyone, MediaTek began 2021 with a very strong Q1. 1st quarter revenues grew Presentation, as well as favorable exchange rate of NT28.3 to Presentation of RMB27.9 to Presentation. 1st quarter gross margin came in at the high end of the guidance due to a better requirement. Before we start business discussion, I'd like to introduce you on how we now break down our revenues. We categorize our revenues into 4 product groups.
The first is mobile phone, The second is IoT, Computing and ASIC. The third is Smart Home and Finally, Power IC. We believe by updating our revenue groups, we could better present our growth strategies for Media and Tech, a diverse product portfolio in their respective Presentation. Addressable markets for all core groups are around of $70,000,000,000 this year, among which mobile phone accounts for $29,000,000,000 Presentation in Addition to Mobile Phone. Smart Home and Power IoT has US5.5 billion dollars $7,000,000,000 respectively.
With our competitive IP portfolio and technology investments, Mobile Home accounted for 54% of 1st quarter revenue, growing very strongly at 149% year over year and 32% sequentially. The substantial increases were mainly driven by 5 gs revenue share gain Presentation as we further expand into high end models. We are seeing healthy smartphone end market demand and continue to believe global 5 gs smartphone shipment would exceed 500,000,000 units this year. Among 5 gs products, which we name Dymensity, our high end 5 gs products adopt Advanced processing technology that offer excellent AI camera and multimedia features. They are highly recognized by the market.
Numerous high end smartphones powered by our Dimensity 1200 presentation from global major brands were launched in the Q1. We expect a strong shipment and revenue ramp Presentation and Presentation. With that, we believe our revenue share in the high end segment to continue to rise throughout the year and beyond. For high volume, mid range and mass market, We expect 5 gs penetration to continue. MediaTek is already a leading 5 gs solution supplier to all major Android smartphone brands.
Based on our strong roadmap and design pipeline, we believe we are able to grow this business further. Moreover, with MediaTek's continuous advances in 5 gs, we are making significant progress Presentation in the U. S. And the Europe markets with further share gains. In early Q2, a global major Android brand launched MediaTek powered 5 gs and 4 gs smartphones in US market.
Together with other models, we expect our smartphone shipments in U. S. And Europe markets to grow meaningfully in 2021. Moving forward, We continue to launch new products to further capture market opportunities next year and beyond. 1 is to offer millimeter wave technology in addition to our sub-six gigahertz 5 gs Solutions.
The other is to expand into the flagship segment by adopting leading advanced process nodes and high performance designs, we believe our flagship solutions will be competitive in penetrating into flagship models. With these initiatives, we are confident that our mobile phone group will grow better than industry for upcoming years. For our IoT Computing and Acer Group, it consists of several fast growing markets, such as Wi Fi, ARM based Computing and ASIC. In the Q1, this Group accounted for 22% of revenue. It grew strongly at 50% year over year, With comprehensive wireless and wire connectivity, ARM based computing and high speed data transmission Noble PC market, VR, competitive WiFi 6, 5 gs, SIM Modem and ARM based computing SoCs.
We also see that migration continues. We forecast our Wi Fi system to account for 15% For ASIC, we have seen very robust gaming console demand since product introduction last year. Our Switch IC and AI accelerated agent projects are also ramping smoothly into rest of the year. With more innovative connected products, we are able to increase our market shares in these product lines. We believe our IoT, Computing and Acer Group Mediahax has a strong leadership position in this market.
This group accounted for 16% of revenue in the Q1. Smart home grew 42% year over year, driven by recovery of the global TV demand from a year ago and grew 5% sequentially as we see a better mix. Presentation. For coming quarters, we see healthy demand in anticipation of global sports events, Now, let me make a few comments on PowerIQ. In the Q1, PowerIQ accounted for 7% Presentation.
It grew 47% from last year, mainly driven by higher power IC content from continuous Consumer product upgrades as well as recovery of global market demand grew 3% presentation from last quarter, reflecting continuation of the market growth. MediaTek provides presentation. We expect Power IoT business to exceed US1 1,000,000,000 this year to grow faster than the overall company in the next few years. Now, turning to Q2 guidance. Following a strong Q1, we expect 2nd quarter revenue to continue to increase for the 4 revenue groups, mainly led by 5 gs smartphone ramp.
We expect our 2nd quarter revenue to be in the range of Presentation.8 billion dollars to 1 100 and 27.5 $1,000,000,000 up 10% to 18% sequentially and up 76% to 89% year over year at a forecasted exchange rate of NT28.2 to 1 US dollar. 2nd quarter gross margin is forecasted presentation should be at 23%, plus or minus 2 percentage points. For 2021 full year, Compared with 3 months ago, we are seeing a stronger growth momentum based Presentation. We expect our capacity to support a better than 40% year over year revenue growth Presentation. We also raised our full year gross margin target to 44% to Presentation.
Based upon the confidence of our business outlook underpinned by our competitive product portfolio and future cash generation ability. The Board approved a regular cash dividend payout ratio In addition, the Board approved a 4 year special cash dividend program, $16 per share every year from 2021 to 2024 Presentation on top of a regular cash dividend. For 2021, subject to shareholders' approval, Total cash dividend to be paid is $13.37 per share, including a regular cash Despite the increases in cash dividend, we are confident that we can continue to invest aggressively in R and D presentation. As evidenced by our US3 $1,000,000,000 R and D investment budget this year, We are fully committed to future R and D investments to further strengthen our global competitive position and create higher value for our shareholders. That concludes my prepared remarks.
Thank you.
Thank you, Rick.
And please ask your questions after your name is announced. And please limit your questions to 2 at a time in order to allow more participants to join the discussion. After two questions, we will move on to the next quarter. Please press 2. And as a reminder, it is greatly appreciated that you turn off the speakerphone mode of your device to prevent Presentation.
The first to ask questions, Gokul Hardiman from JPMorgan.
Yes, thank you. Good afternoon and great results. Congratulations on that. My first question is on the flagship segment. Rick, you talked about increased progress with the timensity, 1100, 1200.
Could we understand what share of the flagship segment, what is the TAM opportunity that we see there that MediaTek can really presentation are kind of breaking too because historically Mediatek has not really been in that segment until very recently. And could we also get a little more details on what are your expectations of how much market share of the TAM can Mediatek take, presentation, especially with your millimeter wave based flagship product coming out later this year or early
next year. That's my first question. Okay. I'll try to let me answer you first the smartphone, As I said earlier, for the high end smartphone 10 to be And by 2023, we expect that Thank you.
Okay. Any thoughts on how much market share VijayTek is targeting over the next couple of years within this segment given you're starting with
Okay. I think for the general market share Right now, we are talking about we are pretty much 45% plus. But for the high end, as you know, right now, we are just in the beginning. So far, based on the design in situation, I think we feel comfortable. Should we have a pretty strong double digit growth for the market share?
Presentation. For the real, I think the shipment will start on to year, probably second half this year for the flagship. Right now, we're shipping The high end of the flagship probably will start to shift starting from Q4 and Q1 next year. I think by the end, we will disclose probably more our target market shares.
Okay. Got it. My second question is on operating margin. I think MediaTek looks like getting back to 20% operating margin after a long time. Could we talk a little bit about how do we see sustainability of this 20 plus percent operating margin over the next few years.
Is that how we like is that the new norm for us when we think about the next 2, 3 years Given I'm getting the part, we hit that number and we were not able to sustain it because of competitive factors, etcetera. So just wanted to understand how you think about operating margin
Okay. Let me address this question first by talking about gross margin. After all, that's the basis for the operating margin. If you look at our I guess, the numbers through the last about 4 years. You can see the We have been improving our gross margin rate from about mid-30s to now about mid-40s.
We report 44.9 percent gross margin today for the Q1, and we are forecasting 44% 46% gross margin rate for the whole year 2021. And this Our policy in our approach in our gross margin improvement is Presentation. Currently now in our industry, I think what we really believe is our Gross margin rate improvement is mainly driven by overall product competitiveness, our earlier investment Presentation and Product mix and right now also a very well diversified and the synergistic business portfolio. We don't obviously, in this tight supply environment, We have firmed up our prices. We have, I would say, Our product mix so that we have, I think, gross margin,
Presentation. Next, we're having Sebastian Ho from CLSA. Go ahead, please.
Thank you. My first question is on the I think the Doctor. Tsai, you mentioned that you're seeing Stronger demand and also stronger customer design right now compared to 3 months ago. So I wonder if
Well, as we search, Of course, the growth is now led by the 5 gs penetration. We are seeing a 5 gs penetration to be on track, as we said earlier, Mid end to the mass market segment, including flagship models, are now being designed with Presentation Manufacturers, which leaves us the confidence in Thank you.
So it seems like so follow on that, so it seems like most of that is driven by the
Presentation. Sebastian, actually, I would say is probably small in mobile like the CEO, Doctor. Cai, talked Earlier, we actually, at this time, will break down the 4 major business groups. And as you can see, for the IoT compute and ASIC, Presentation. For Q1, we see a more than 50% year over year growth.
And for smart home, for Q1, we saw a more than 40% For PMIC, we also see more than 40% year over year growth as well. So it's really We see pretty strong growth and the world's strong demand across all 4 major products business group. And Presentation And from the revenue contribution perspective, smartphone, of course, is actually still to have a lion's share of our overall revenue. But in terms of growth opportunity, it's been Pretty diversified and pretty balanced.
Okay. Thank you. My second question is, if I look at the growth rate presentation. For the new four business breakdown, I think the smart the mobile grew almost 150% year on year presentation. Last quarter and the rest of the three business is growing on average about 40% to 50% year on year.
Looking into the second the next 12 months when we move into second half this year, how do you see such a year on year growth rate
I think for this year's, like the CEO, Doctor. Cai talked about, for the full year, I mean the competitive constraint, I think we should be able to support a better than 40% year over year growth for the full year. And if we break this down into the 4 business groups, I think smartphones definitely have a much stronger growth, more than 40%. But for other line of business, I think in general, I think they'll be either higher than 40% or slightly very close to 40% Growth, I think that's what we see for this year. For the coming few years, I think like the first question that JPMorgan talked about Once we start getting to the higher end segment of the smartphone, I think the addressable market is actually very sizable.
And currently, we have a very low market share. And we do believe actually with our strong product portfolio and the compactness of our product portfolio, We should be able to continue to grow on the smartphone side. For the non smartphone side, because it is well diversified For IoT, on computing, for the smart home, for the PMIC, we do believe actually the end market demand It's still very healthy. Whether or not it will continue to grow at 40%, probably not, but we still believe actually we'll see a pretty healthy growth across all business lines.
Now we're having Randy Abrams from Credit Suisse. Go ahead please.
Okay. Yes, thank you. And congratulations on the results and also the Change in the payout policy. I wanted to ask the first one about the segments. The first part of it just more a request if it's It's possible to get the base from last year, either full year or the quarters for the cure over cure year over year compares As we move to the new structure.
And then just a couple of follow ups looking forward. The Smart Home business, Should we think of that that's mapped pretty similar to the prior TV set top box? It originally was considered more mature product. It was viewed kind of cash cow stable. Or are there some growth applications in there?
And and And your view on that smart home piece because we've had the pandemic, should we view that as more of a stable business mid term?
Reni, first question first. I think because for this quarter, we started to give out the full business group both for quarter over quarter growth and also year over year growth. So you should be able to basically reverse your earning to calculate about the last year, the baseline for the full But to save your time, I think we can give you the information after the call and send to everyone if they want to need that. And so So that's the first one. The second one, we'll talk about what's the change.
I think the major change is really we take out or separate out the Power IC. The Power IC being a pretty sizable business Right now, like the CEO explained earlier, this year, we are kind of expecting the TAO IC revenue will be over 1,000,000,000 US dollar with a very strong growth rate. And other than that, I mean, the power IC, because of the strong growth natural, in the past, we put up that category underneath something we call the growth sector. So pretty much you can think about in the past, we carve out or we take out The power IC become a new group. Everything else pretty much stayed the same.
So the small home in the past, actually, we never made it call SmallHomes and others are pretty much just SmallHomes TV over there. So in terms of change, the major change is just we take out
Okay. Randy, you specifically asked about smart home. Yes, indeed TV is a big chunk We also actually have a very actually high growing and high margin And for the year of 2021, actually, they have, Presentation, I would say also a very good growth by over 30% year over year. With the leading position we have We believe we have a pretty good And
my second question on the mobile market, It's more just the 2 concerns we hear in the market. One is whether the build rate, MIIT for China showed a good rebound back about $90,000,000 a quarter. But I guess your take looking at the overall market, both from a China and an export, how you see the Demand health in the market, that's the first part. And the second part, there's a bit of a concern in the competitive environment have been able to build inventory ahead of the coming quarters. And so there's a fear that it might be less benign if they get better availability later in the year.
So if you could address just a view on kind of market health for China and emerging market, how that looks and also a view on the landscape relative to your competitor?
Well, as I said earlier, I think the 5 gs China market, I think, overall, smartphone shipments probably stay above that. The main thing, of course, is the ratio of the 5 gs to 4 gs, basically 5 gs penetration. We believe there will be overall about 300,000,000 5 gs smartphone shipments in China this year. The Q1 number, they were true number, which came out, I think, If you take into consideration of the seasonality, it's about on track for such Total shipment number for 5 gs. So, we are Comfortable with our 5 gs smartphone shipment forecast, demand forecast.
And Presentation. And we have been looking at very closely Kooijriq, all seem at a pretty low level and actually quite a bit below So, the way that's a result we feel confident about our forecast for 2021 5 gs shipment. A few of the competition, For 1, first, of course, we don't comment on competitors' action or strategy. Indeed, you are right to say that up to now, When you to your benign environment, we do not That's why we kind of like the comment I just made on the gross margin Whether we have invested in the product roadmap from flagship to We saw that We think we have the good fundamentals to thrive in this market
Presentation. Next in line is Bruce Lu from Goldman Sachs. Go ahead please.
Hi. Thank you for taking my question. I tried to I'll get some more color for the smartphone addressable market. Can you provide us a bit more detailed breakdown in terms of the smartphone addressable market? It seems to me that So your revenue share is substantially lower than your shipment share.
So How big is like 4 gs versus 5 gs? What is the growth rate for the addressable market moving forward?
Bruce, sorry, I just wanted to clarify your question. Just trying to understand the overall the total shipment, basically
The market demand? No, the question is more about the addressable market. I think Doctor. Riggs presentation. You mentioned that the smartphone addressable market was about 30,000,000,000.
Your revenue for the smartphone this year is roughly around like tried to know what is the building block for this $30,000,000,000 How much is for 4 gs? How much is for 5 gs? Or maybe a little bit between like sub 6 millimeter wave or mid to low to high end, how does that break down for that 30,000,000,000 yen?
Okay. Bruce, let me just try to explain. I think, overall, this year, we're looking for roughly RMB 1,400,000,000 units shipment. Out of that, I I think $500,000,000 is 5 gs and also the rest of them 4 gs. On average, I think 5 gs, they exceed much higher than 4 gs.
So out of that 20, let's just say, Wrong number, RMB30 1,000,000,000. I would say probably it's onethree of the S4 gs, twothree of that is 5 gs. And on the 5 gs side, I think we also kind of explained if you're including millimeter wave and also the high end, Overall, it accounts for roughly RMB8 1,000,000,000 to RMB9 1,000,000,000. So currently, I guess, what you see, our revenue share is relatively low compared to our shipment shares. Actually, A, we don't have a sizable high end shipment yet.
B, I think our minimum wage will start just actually presentation will start to mass production later this year. So we didn't really fully realize the revenue potential yet, but we do have the technology Okay. One thing is actually the 29 business also including the team orders, actually The Apple Business as
well. I'm sorry, the SIM modem was not included in the 10, right?
No, it's included in the 10 as well.
I see. Okay. Thank you. The next question is that the MediaTek is more for the bigger pictures. The MediaTek's revenue is Much, much smaller.
The revenue from by non China customer is much, much smaller. So can you give us more about like how do What's the strategy to be like more balanced or more or our company will try to stick with like more focus for the consumer and smartphone
I think the company certainly as Presentation. You can see from the past 3, 4 years, the company has delivered much more Presentation. We certainly are seeing smartphone revenue to occupy over 50% of the total revenue. On the other hand, if you look at the dollar amount of different Huwanna lines Huwanna Groups It has been our strategy to drive our growth Certainly, we cannot control the end market demand momentum ourselves. And that's why we need a diversified portfolio.
And it still happens, of course, Our technology and our investment in the product line product portfolio in the 5 gs Error just well, I think we hit the market really well at the very beginning, and we continued. Smartphone is getting to be at such high percentage, but We also know as you guys do, all high growth business will IoT, the ARM Computing SoCs and the all the And we ensure we try to ensure that they can all have a strong growth, sustainable growth. Also, as we said in the remarks that we are expanding aggressively So it is a long road, I agree. But if you look at the numbers by both absolute numbers and You should see the efforts and the results Presentation. We're pleased and comfortable that we will continue moving in that direction and we will as time goes on in the next 3, 4 years, we'll
Your recent collaboration with NVIDIA, does that really can we view that as a game changer or A step up in terms of like getting to the server business or
how should we look at this?
The collaboration with NVIDIA is mainly for the PC on the PC side. I think in particular probably more towards high performance Gaming type of PCs, which is really a perfect match Between the two companies in providing that platform, it's certainly depending on how you look at it. I do not right now. If you look at from the step into the PC Presentation, I think, is very, very significant for us. Our investment in ARM computing Stephanie, it's not the fruits of which, Stephanie, we're not just in the smartphone Presentation.
It has been for a while that we want to expand that investment into different segments such as notebook PC. But from a data center point of view, I think there We have a different approach basically through more through ASIC type of Presentation. Again, I think our investment in the we have really close working relationship with We are always one of the top 2 to going Thank you.
Thank you. Right now, we're having Roland Qi from Citigroup to ask questions.
Hi, thanks. For your gross margin target presentation have been raised from 43% to 44% to 46%. So my question is, how much
So, I'm assuming when you say higher price, I'm assuming we increase the Presentation.
Pricing, is that
what you mean?
Yes.
I think that's a wrong impression. I think like the CEO explained, we didn't really take the Our new stake approach to adjust our pricing. I think what we did is actually we're just firming out the pricing, which means that we will slow down or no decline for the ASP. And more importantly, we adjust our product portfolio. So it's mainly coming out from the product portfolio and also segmentation expansion.
Okay.
Understood. And
also, are your full platform on the product gross margins are growing at a similar magnitude as you raised it.
Different product on an absolute level, I think Most business groups have a similar product, very close to corporate average. Of course, some of them are lower, some of them are higher. But in general, they are all within that range. We didn't receive any one like the big laggards.
How about smartphone? Is smartphone gross margin
I think smartphone is very close, given the fact that smartphone right now contributed to roughly more than 5 So based on the math and the gross margin need to be very close to the gross margin.
Understood. Okay. Thank you. My second question is, I remember when Rick first joined as a CEO for MediaTek. Let's say, I think one of the decision Rick made was just stop doing for the high end flagship chipset for smartphone.
And now you would like to try to reenter this flagship smartphone business. So I just want to ask
Yes. I think you're talking about back about 4 years ago that we I mean, almost 5 years ago, we did have For the 4 gs market, which well, the numbers was there, which was not very We've also took up quite a bit of resources of ours. So we decided at the time that Actually, at the time, it was very robust by that time, what we call 93 4 gs modem. Because we really believe that We must put our foot down and make a comeback, try to also with the right product, We should write capability to convince our customers. And fast forward To 2021 or 2020, actually, if you look at the D Dimensity 1000, when we had that Product back in the end of 2019, it was designed to be high end, what we would call high end product already.
You had a tough fight, I would say, in the first half of twenty twenty, but Going into second half and into first quarter this year, that product has done really well with customers. And also with the users in the end market. And Presentation. And the Dimensity 1200 is a follow through and we are seeing tremendous design And it's mainly because our R and D investment, which we are really focused on getting the 5 gs modem, getting the leading edge ARM CPU, early in edge AI processor and the multimedia, our traditional Strength, we double down on all those things. And they whether we prove ourselves right, I guess, Such investment and the now we are really very confident that the flagship chips We are declining and going into production soon, but will be a very competitive one.
Presentation. Yes, understood. I think I get your point, you have the right product and right technology now. But I think Presentation. And now the question
is from Sorry for the interruption, Roland. We still got several analysts on the line. So I'm going to put you back in the conference room. Thank you. Okay.
Ladies and gentlemen, next one to ask questions, Brett Simpson, Arete.
Yes, thanks very much. David, just to clarify the revenue outlook, are you saying MediaTek grows sales Over 40% in 2021. And if that's the case, it implies your second half sales might decline half on half In the second half, is that the right way to read this?
I think, first of all, it's better than 40%. Secondly, this year, our overall growth is somehow still constrained by the overall supply constraint. So for the second half versus the first half, I think the seasonality will be different compared to the last few years, mainly due to the supply constraint. On the demand side, even though it's still
very strong. Understand. And just on the supply constraints, can you maybe talk about to what extent Is wafer pricing going up this year and next year? And to what extent can you pass this on to your customers?
I think with this year, it's mainly on the capacity, really in the wafer pricing because the wafer pricing right now, it's pretty much been all been reflecting In our financial already, in our course model. So this year is really just the industry wide supply constraint and especially for some companion to Presentation of Mature Technology.
Okay, super. And maybe just shifting to Doctor. And Presentation. In your prepared remarks, you talked about the new breakdown for the business, but you didn't talk about automotive as a kind of a focus area. Can Can you maybe just share with us your perspective on what's the automotive strategy at MediaTek?
And what areas in the car can you address? What sort Presentation. Content per car does that translate to? And when might Automotive deliver a meaningful contribution to revenues at MediaTek? Thank you.
Okay. Automotive, actually, we are shipping real products presentation is very similar to our customers and actually the growth of the revenue is pretty substantial. However, compared to the overall company revenue is still rather small. So we're not reporting that specifically. We are focusing on the 2 mainly 2 segments.
1 is The other one being IVI or some people call that smart carpet, Utilizing basically obviously, utilizing our strength in the Our if you want to call that strategy, our strategy is really Presentation. To make sure we have these products to be very solid with the major OEM makers, We want to build our reputation. As you know, automotive industry is a very So that the strategy simply is to have those 2 products really showing our ability Our values, and we will we continue to invest in that. Once Once we understand a little better, I think with the current focus now, everybody is almost in EV and Telecom's driving media tech with our computation, with our connectivity, with our power I see capabilities, I think we really have I look forward to a much brighter future.
Brett, just one more footnote. I think for the multi industries, our revenue, we actually put that underneath IoT, Computing and Asset Business Group.
Presentation. Ladies and gentlemen, we are running out of time. So we are going to take the last one to ask questions. And the last one to ask questions is Sunny Lin from UBS.
Hi. Thank you for taking my questions. Can you hear me?
Yes.
Thank you. So my first question is on your strategy to penetrate into the higher end 5 gs SoC.
I guess what I should say is The major change is our capability being able to Customers, so they are willing to work with us on such flagship phone design. The overall market, I think, is still good as we described earlier in presentation. I think these are very attractive ten numbers. So for us To continue growing in this very important mobile phone business, we just have to
Got it. And maybe a very quick follow-up. If you look into 2022, Is there a target for the volume contribution or revenue contribution from this flagship 5 gs SoC?
Sony, we will try to provide some guidance probably either later this year or earlier next year.
Sure. No problem. My second question is on the supply chain tightness. So as the Supply chain tightness appears to continue, but the overall 5 gs volume continues to ramp. So if we think into second half of twenty twenty two, how do you continue to grow?
And what's the diversification efforts that you are taking to ease the supply chain tightness. Thank you very much.
First of all, we are working Certainly, on already 2022 capacity supply with our major or I don't think we can get everything we want as everybody else But what we believe is the capacity We're getting for 2022 will give us I cannot say the numbers now, but will give us a pretty good Growth for next year. I'm not too worried about it. As to the diversification, this strategy It's our long haul strategy, and it will not change just because of the capacity tightness We will work within ourselves and with our customers to ensure that we can supply presentation is a whole in smart home or power. That's our general strategy. Thank you.
Thank you very much.
Ladies and gentlemen, we thank you for all your questions. But right now, I'm going to pass it on to Ms. Jessie Wang for closing comments. Ms. Huang, please proceed.
Ladies and gentlemen, this concludes MediaTek 2021 Q1 conference call. We would like to thank you for your Presentation. And you may now disconnect.
Thank you, Jesse. And we thank you for your participation in today's conference. You may now disconnect. Thank you again and goodbye.