Welcome to the MediaTek 2018 first quarter investors conference call. Your speakers today are David Ku, MediaTek CFO and spokesman, and Jessie Wang, MediaTek Manager of Investor Relations. Ms. Jessie Wang will report quarter results first, and Mr. David Ku will provide prepared remarks. After that, we will open for Q&A. Now, I would like to turn the call over to Ms. Jessie Wang. Jessie, please go ahead.
Good afternoon, everyone. Welcome to MediaTek's first quarter 2018 conference call. As a reminder, all content provided on this teleconference is for informational purposes only, not intended for investment advice. Neither the issuer nor any of the independent providers is liable for any actions taken in reliance on content covered herein. MediaTek provides non-T-IFRS financial measures and supplemental information wherein its distribution is made in accordance with financial statements based on T-IFRS. Unauthorized recording or redistribution of the video, audio, text in the presentation content of this teleconference is strictly prohibited. By participating in this teleconference, you agree to accept the foregoing terms and conditions. Now, let's start with the 2018 first quarter financial results. The currency here is the TWD. Revenue for the quarter was TWD 49.7 billion, down 17.8% sequentially, and down 11.5% year-over-year.
Gross margin of the quarter was 38.4%, up one percentage point sequentially, and up 4.9 percentage points year-over-year. Operating expenses for the quarter were TWD 17.2 billion, compared with TWD 22.3 billion in the previous quarter, and TWD 17.6 billion in the same period last year. Operating income for the quarter was TWD 1.9 billion, up 49.5% sequentially, and up 59.2% year-over-year. Operating margin for the quarter was 3.9%, compared with 2.1% in the previous quarter, and 2.2% in the same period last year. Net income of the quarter was TWD 2.7 billion, compared with TWD 10.2 billion in the previous quarter, and TWD 6.6 billion in the year-ago quarter. Net profit margin for the quarter was 5.4%, compared with 15.8% in the previous quarter, and 11.8% in the year-ago quarter. EPS for the quarter was TWD 1.69, compared with TWD 6.5 in the previous quarter, and TWD 4.29 in the same quarter last year.
Please note that net income, net profit margins, EPS for the previous and the year-ago quarters, both include one-off non-operating disposal gain, which was not included in the first quarter. We also provide non-T-IFRS financial measures, which exclude share-based compensation, amortization of acquisition related assets, and tax effects. Please refer to our press release and the presentation for details. Now, I would like to turn the call to CFO, Mr. David Ku, for prepared remarks.
Good afternoon or good morning, depending on where you are. I'm going to go through the three, provide some more detail for the three major business segments. I will start from mobile computing. Mobile computing, by the way, which includes smartphone and tablet. For first quarter, for this quarter, mobile computing is accounting for roughly 30%-35% of our overall first quarter revenue. For first quarter, we have a pretty good quarters both for market share gain and also for gross margin improvement on our smartphone product. Especially for new Helio P60 product, which is the first one of its kind to integrate APU. We partner with several artificial intelligence vendors, which is starting to shift very small volume in Q1, and we will see a much stronger shipments in Q2.
We will also like to reiterate that MediaTek been investing 5G aggressively, currently both in sub-6 GHz and also for millimeter wave. Currently, we are targeting to have 5G pre-commercial launch in 2019. That's a quick update for mobile computing. I'm going to move on to the growth sectors. The growth sector, which include IoT product, PMIC, power management IC, and also custom design ASIC chip. In Q1, the whole growth sectors account for roughly 30%-35% of overall revenue. For the growth sectors, earlier this year and late last year, we indicate last year the growth rate was very strong. Last year, the year-over-year growth rate was more than 30%. For this year, the guidance for the full year, the guidance that we give out, is also we're looking for a two-digit growth for this year.
For first quarter and also with our second quarter visibility, we feel fairly comfortable that for the first half this year, we see a pretty strong year-over-year growth, which is a double-digit growth this year. Looking to second half this year, we're still looking for a pretty healthy growth. Given the fact, starting from second half last year, the base was very high. In terms of a year-over-year growth rate, we'll be slightly down a little bit. Overall, we're still looking for pretty healthy growth rates, for the mid to long term. Again, double-digit growth rate, that's what we mean by the healthy growth rate. A little bit more detail about the growth sectors, especially we have some pretty good updates and progress in our ASIC business.
For the ASIC business, on top of our current consumer product ASIC business, we are also seeing pretty aggressively march into the new segments. We announced our first 7nm silicon-proven 50, 60 gigahertz IP on the SerDes side, as it's been announced. Currently MediaTek is one of the few companies who can provide a comprehensive product portfolio on the SerDes IP, all the way up to 112 gigahertz IP. Coupled with our SoC integration capability and the process and technology, we do believe ASIC business provide a pretty good long-term growth opportunity, not only on consumer product, but also right now in this high-speed I/O. Going forward, we believe we should put it on AI and also other areas as well. The next thing in mind in this segment is the PMIC business.
I think for the power management IC, this quarter, we see a healthy growth. I think for the PMIC IC, we have a different exposure on different segments, which including PC, smartphone, consumer product. I think the highlight for this quarter is actually the new product getting into the SSD markets has been proven and start to ship. We hope that will provide a new growth driver for our PMIC business. Last but not least, is really IoT. I think IoT this quarter, Q1 and Q2, are relatively stable. For IoT, I think for this quarter, we have a joint development with Microsoft to launch our IoT solution, which basically connect directly to Microsoft, his cloud service.
For a lot of device vendors out there, all they need to do is just purchase our product so they can just work very smoothly and easily with Microsoft cloud service. That we believe will provide the new revenue opportunities for us. On top of that, I think we also being quite aggressively in investing Narrowband IoT. I think the product will be up and running, and right now it's in the design in and design win stage. We do believe we should be able to see some meaningful volume ramp-up starting from second half this year. I think that pretty much concludes my update on the growth sector. Last but not least, is really the other consumer products and feature phone product. I think underneath this segment, which including digital TV, feature phone, solid state optical storage, and also Blu-ray DVD.
For this sector, I think the overall revenue account for 30%-35% in Q1. I think for this quarter, the highlight for other consumer product and feature phone product is after three years of mark of antitrust ruling observation period, I think finally we got relief from the observation period in February this year. In today, basically the both MediaTek and also MStar board meeting approved a truly full merger and integration among these two company. We have a targeting effective date on January 1st, 2019. I think due to this new merger, or new integration I should say, because the merger happened three years ago. Due to their full integration efforts, we will set up a new business group which will host both the TV business from MStar and also from MediaTek's side.
We believe by consolidating the R&D resource and also the technology expertise, plus the product portfolio, we should be able to provide a much better service and much more competitive solution to our customer and help them to further grow their business. I think that pretty much concludes my other consumer and also feature phone product. By the way, the last point is, in today, the board also passing about the cash dividend approval. I think for this year, we will pay out TWD 10 per share as the cash dividends for this year. Of course, this was subject to the shareholders' approval. At least for today, the board have approved that proposal, and we will submit that for shareholder approval for our shareholder meeting, which is scheduled in mid-June. I think that concludes my update.
Okay. Thank you, . We are now ready for Q&A session. May we please have the first question operator?
Yes. Thank you. We are now in question and answer session. If you would like to ask a question, please press 01 on your telephone keypad. Please ask your question after your name is announced. To cancel your question, just please press 02. As a reminder, it is greatly appreciated that you turn off the speakerphone mode of your device to prevent possible echo effect. We thank you for your cooperation. Now, please press 01 if you would like to ask questions. Thank you. The first to ask question is Randy Abrams from Credit Suisse. Go ahead, please.
Okay. Yes, thank you. I appreciate the additional remarks today. I wanted to ask the first question about the assumption to grow units for this year, which I think is based on the first half run rate. It would imply a pretty big ramp to about 120 million per quarter in the second half. I'm curious about the drivers, like what you're factoring in, just both from a market share and mix, to see that type of ramp, if we're doing the math right.
Well, okay. Randy, first of all, I think for last year, when we talked about the overall shipment for mobile computing, the number is ranging from 435 million-455 million. Please bear in mind that that also included the tablet shipment. Okay? When we're talking about volume growth for this year, we're talking about the volume growth for the smartphone, not necessarily including the tablet business. Probably, the first thing I'm trying to highlight to everyone is actually when we try to calculate the smartphone revenue, you need to separate smartphones and also the part of the mobile shipment. Just bear in mind, last year's numbers also included tablets. That's the first point. Second point, Randy, to get back to your earlier question, I think we see, starting from Q2, a pretty healthy final selling into fill through numbers.
As people can tell, I think starting from the fourth quarter last year and also mind last third quarter this year, I think the channel inventory is getting very low. Starting from Q2, we see pretty much all the major players in the market start to restack their channel, the overall market channel. On top of that, also starting from Q2, normally there's a new product cycle from the customer side. We really see a pretty good ramp to stock both for Q2. Right now, it may be a little too early to talk about Q3, but we do feel the momentum should be able to continue getting into Q3.
Okay, great.
On top of that.
Go ahead.
we're also looking for the market share again this year, because based on the Design Win and the Design Loss situations of the few key customer, we do believe we are actually getting market shares back and actually winning more market share this year. It's coupled with the customer product portfolio and also the product launching schedule and also our market share again. That's why we see a pretty good opportunity for us to continue to grow the shipment on the smartphone side on a year-over-year basis.
Okay. Maybe two quick follow-ups on that. If you could give a sense to get a feel on the mix, where in first quarter Helio was and your latest expectation on Helio. Then, I guess, on your own inventory level, it looks like a pre-build. Want to make sure it's, or see the mix, if any is from the older products due to the market slowdown or most of that, some of the new products ramping up.
I think most likely, it will be the new product ramping up. Maybe one easy way to explain the overall situation is, when we say new product, which including the Helio P series product, but not only limited to the Helio product. In our definition, new product basically means the new mobile architectures. For Q1, our view is for the revenue contribution from the new models is roughly 35%+. In Q2, we believe the revenue coming up from the new model architecture should be more than 50%.
Okay. In terms of Helio, like what percent you expect the P or just the Helio series to ramp up to?
Well, I think for Q2, we see a big ramp in our Helio P series, specifically will be P60. I think also in the second half of this year, I think we will have another Helio P series product, as we will report to everyone in more details when it actually comes to market.
Okay. For the carrier aggregation, there was the move where you now have sweet spot on Cat7. Do you see any other shift? You do have that modem that can do Cat12, is there any new change in the market requirement, or is that staying pretty stable for a while for most of the market?
I think from technology or product readiness perspective, we have everything we need right now, which including the category carrier aggregation and also a category 12 and beyond. If you focus on what the product really needs right now, our view is actually Cat7 pretty much is what the market needs for the mainstream alone. For the super high-end product, flagship product, might be people looking for something to differentiate the price tag. In reality, I think Cat7 right now is actually pretty sufficient. Again, like I said earlier, technology-wise and also product-wise, I think we are ready if the market needs that Cat12 product.
Okay. No, thank you. The last question I have was just on the networking, where you have now the SerDes and some of the IP there. If you could give a view, it's probably more next year, the type of contribution and opportunity you're going after in that market.
Well, I think for.