Taiwan's MediaTek flags supply chain crunch from AI, says will adjust prices

TAIPEI, Feb 4 (Reuters) – A surge in demand for artificial intelligence applications is straining supply chains and driving up costs, Taiwan's top chip design company MediaTek said on Wednesday, adding it would adjust its own prices in response. Taiwanese tech companies like MediaTek and TSMC, the world's largest contract chipmaker, have reported surging business thanks to the AI boom. MediaTek Chief Executive Rick Tsai told a quarterly earnings conference call that he was very confident in the company's outlook, but warned on supply chain problems. "With AI serving as a catalyst for industry expansion and driving the surge in demand, the global supply chain is facing challenges in fully meeting the increasing needs in 2026, resulting in higher costs across the supply chain," he said. "We will also adjust our pricings to reflect the rising supply chain costs and allocate our supply across products based on the overall profitability," Tsai added, without elaborating. He reiterated comments given on the company's last earnings call in October that MediaTek expects to earn revenue of billions of dollars from its AI accelerator ASIC chips by 2027. The total addressable market (TAM) for data centre ASIC chips is now estimated at $50-70 billion, $20 billion more than the previous estimate, Tsai added. MediaTek has partnered with Nvidia to co-design the GB10 Grace Blackwell Superchip used in Nvidia's DGX Spark, a personal AI supercomputer that went on sale last year. Tsai, who attended Nvidia CEO Jensen Huang's high profile dinner with Taiwanese suppliers on Saturday in Taipei, said MediaTek had observed "very positive feedback" for DGX Spark, and expected its revenue growth to accelerate into 2026. On Wednesday, MediaTek reported fourth-quarter revenue of T$150.2 billion ($4.76 billion), up 8.8% from a year earlier, while net income was down 3.6% at T$23.1 billion. MediaTek shares have gained 26% this year, outperforming a rise of 11.5% on the benchmark index. The stock closed up 0.3% on Wednesday ahead of its earnings release. TSMC last month posted a forecast-smashing 35% jump in fourth-quarter profit to a record high. ($1 = 31.5440 Taiwan dollars) (Reporting by Ben Blanchard; Editing by Raju Gopalakrishnan)

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