Taiwan’s MediaTek, a leading chip design company, is pivoting its focus to chips for cars and AI computing as demand for consumer electronics continues to be impacted by inflation and macroeconomic uncertainty.

The company’s CEO, Rick Tsai, revealed the shift in a recent earnings call, stating that the move towards the auto and computing industries will support the company’s growth over the next three to five years.

Heavy investments in AI computing

Tsai emphasized the importance of allocating precious resources towards areas related to computing and investing heavily in AI, such as AI chips that are necessary for the development of autonomous vehicles. He also expressed confidence in the company’s ability to support generative AI like ChatGPT, indicating the company’s strong commitment to expanding in these areas.

Smartphone demand remains weak

While the company anticipates signs of recovery later this year, smartphone demand has remained weak throughout the first quarter. Tsai revealed that the company expects mobile revenue to remain flat in the second quarter and rise in the second half, as customers continue to be cautious about future demand.

Shifting priorities to address demand

As the demand for consumer electronics continues to be impacted by various factors, including supply gluts and macroeconomic uncertainty, MediaTek’s shift in focus towards the auto and computing industries reflects the company’s determination to adapt to changing market conditions. The heavy investments in AI and auto chips also indicate the company’s commitment to supporting the development of new technologies and emerging industries.