Taiwan’s MediaTek has approved $5bn discretionary financing budget to support its long-term development, including expansion into AI chips for data centres, according to Reuters.
The investment will support MediaTek’s efforts to diversify beyond its traditional focus on smartphone processors.
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The company is seeking to become a significant supplier of custom AI chips, known as application-specific integrated circuits (ASICs), targeting large cloud service providers.
MediaTek’s entry into the data centre sector comes amid increased spending on AI infrastructure, a market area dominated by a small group of established firms.
MediaTek CEO Rick Tsai said: “This flexible framework provides us with the optionality, when needed, to agilely support our long-term growth and capitalise on massive data centre opportunities.”
The company reported that it has raised its 2027 addressable market estimate for custom AI chips to $80bn, up from a previous forecast of $70bn to $80bn.
MediaTek also increased its target share of this market to between 15% and 20%, compared with the earlier 10% to 15% range.
Tsai confirmed that MediaTek has completed development of its first custom AI chip for data centres, with production to start in the fourth quarter of this year. A second product is scheduled to enter volume production by 2028.
Projections from the company indicate that its AI chip business for data centres could generate over $2bn in revenue by 2026.
MediaTek’s push towards data centre AI chips comes amid falling mobile-chip sales, with revenue for this business unit dropping 20% year-on-year in the most recent quarter.
The company pointed to increased component costs and declining global smartphone shipments as contributing factors.
MediaTek posted quarterly revenue of T$152.18bn ($4.71bn), an increase of 1.2% on the previous year, while net income fell 12.3% to T$24.6bn.
