Source:
The RegisterTaiwanese silicon biz believes it can take up to 20% of $80B market with upcoming ASIC chips
Taiwanese chipmaker MediaTek is lining up $5 billion in financing to expand into AI datacenter silicon, targeting a slice of a market it expects to be worth up to $80 billion next year. The fabless chip producer is perhaps best known for its Arm-based smartphone and Chromebook chipsets, plus wireless silicon for Wi-Fi products. But the firm is the latest to see a "compelling growth opportunity" in the market for
computeto power AI and so-calledagentic AIin particular. MediaTek is targeting application-specific integrated circuits (ASICs) rather than GPUs and reckons it can capture 15 to 20 percent of the market. The company's board has also approved $5 billion in financing to secure supply chain capacity and fuel an expansion from AI ASIC chips to full-scale systems and platforms, MediaTek stated. Chief exec Dr Rick Tsai spelled it out during an analyst call for the company's Q2 2026 earnings. "Recently, the release of increasingly capable frontier AI models, together with the rapid transition toward agentic AI, has become a key driver of compute demand across both cloud andedge AI," he stated. "Agentic AI, which executes a series of actions, including planning,reasoning, execution, and self-correction, further increases workloads. This represents a compelling growth opportunity for MediaTek, as we are well-positioned to support both the scaling of AI datacenters and the proliferation of agentic AI experiences across a broad range of edge devices." MediaTek says that its first ASIC family has been developed in "close partnership with major US cloud service provider customers," and is scheduled to enter production in the fourth quarter of this year. A second AI accelerator design is also progressing well and aims to offer a step up in compute performance. The chip biz expects its AI datacenter ASIC revenue to exceed $2 billion in 2026, scaling substantially next year, primarily driven by increasing customer demand for its technology, which boasts optimized performance for TCO and performance per watt at scale, Tsai claims. "With close collaboration with our advanced packaging partner, the yield and reliability of the second ASIC are on track for high-volume production in 2028. We're confident in capturing additional market share when this ASIC ramps up," Tsai told analysts. But MediaTek will be facing competition from rivals such as Broadcom and Marvell, which already design ASICs for the AI market, and even Google, which announced plans to start selling its custom tensor processing units (TPUs) to some customers earlier this year. According to a Bloomberg Intelligence report from January, the market for AI ASICs is projected to expand at a 27 percent compound annual rate to reach $118 billion by 2033, and grow from just 8 percent of the total AI accelerator arena in 2024 to 19 percent in 2033. MediaTek reported Q2 revenue of NT$152.18 billion ($4.68 billion), up just 1.2 percent year-on-year, but operating income was down by 22 percent to NT$22.87 billion ($705 million). ®Get AI news in your inbox
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Key Terms Explained #
Agentic AI
Agentic AI refers to AI systems that can autonomously plan, execute multi-step tasks, use tools, and make decisions with minimal human oversight.
Compute
The processing power needed to train and run AI models.
Edge AI
Running AI models directly on local devices (phones, laptops, IoT devices) instead of in the cloud.
Reasoning
The ability of AI models to draw conclusions, solve problems logically, and work through multi-step challenges.