Home / Business and Economy / MediaTek Surges on Google AI Chip Tie-Up
MediaTek Surges on Google AI Chip Tie-Up
26 Jan
Summary
- MediaTek stock achieved its best two-day rally ever.
- Company's work on Google's AI Tensor Processing Units drives growth.
- Fund managers diversify into AI firms due to TSMC limits.
MediaTek Inc. shares experienced an unprecedented two-day rally, marking its best performance on record and closing at an all-time high. This surge was driven by investor enthusiasm for the company's collaboration with Google on artificial intelligence applications.
The company's stock jumped 8.6% on Monday, extending a two-month upward trend. This performance highlights MediaTek's growing prominence in AI-specific integrated circuits, particularly its work on Google's Tensor Processing Units (TPUs).
Fund managers, facing single-stock limits on giants like Taiwan Semiconductor Manufacturing Co. (TSMC), are diversifying into AI-focused firms. MediaTek's strategic shift from smartphone chips to high-margin custom AI solutions makes it an attractive alternative.
Analysts from Morgan Stanley noted significant potential in MediaTek's AI application-specific integrated circuits. They suggest that as MediaTek converts smartphone-related resources to AI chips, it could see more growth than competitors like Broadcom Inc., which also works with Google on TPUs.
MediaTek's gains contributed to Taiwan's benchmark Taiex reaching a new record, alongside other tech companies. Meanwhile, TSMC shares saw a slight decline. Analysts at Morningstar Inc. believe MediaTek's current guidance may be conservative, potentially allowing the company to exceed targets.
