MediaTek TPU v9's win or lose outcome is becoming more binary, while pressure on the smartphone business is increasing

Overview

This report is a JPMorgan company research and earnings outlook on MediaTek Inc. with the core conclusion to maintain Neutral. The report argues that market focus has shifted from the relatively clear TPU v8 to TPU v9, where TPU v9 design-win outcomes are becoming increasingly binary; at the same time, competition in the Google AI Compute ecosystem has intensified, and weak smartphone demand makes MediaTek's risk-reward less clear than other AI semiconductor beneficiaries.

Core views

The report believes MediaTek has substantial upside in TPU v9 but low certainty. In a bull case, if Humufish reaches about one-third share of TPU v9 in 2028, ASIC revenue could reach roughly US$25.3bn and 2028E EPS could reach NT$176; in a bear case, if Humufish fails to ramp on time, 2028 ASIC revenue would be around US$6.1bn and 2028E EPS around NT$84. JPMorgan's base case is 2028 ASIC revenue of about US$10bn, and it believes it is more probable that project awards are tilted toward Broadcom.

Analysis framework

The report combines channel checks, TPU v8/v9 project progress assessment, bull/bear scenario analysis, smartphone demand and supply-chain observations, and the SoTP valuation framework to model MediaTek's AI ASIC and core mobile business separately. Valuation uses a 15x forward 12-month P/E for core operations and a 25x forward 12-month P/E for datacenter ASIC-related earnings.

Methodology notes

• Valuation frameworkSoTP segment valuation

  Core earnings at 15x P/E plus ASIC-related earnings at 25x P/E

  The NT$1,600 target is based on a Dec-26 SoTP valuation. The core-business multiple is at the low end of the long-term range to reflect margin pressure and weak near-term revenue growth, while ASIC-related earnings are assigned a higher multiple to reflect market optimism for AI programs.

• Scenario analysisTPU revenue bull/bear scenarios

  Calculates 2027/2028 outcomes by TPU shipments, share, revenue, and EPS sensitivity

  The report divides 2028 TPU outcomes into base, bull, and bear scenarios and emphasizes that upside in the stock is highly dependent on Humufish being able to scale successfully in TPU v9.

• Supply-chain researchChannel checks

  Compares the technology paths and supply chain of Broadcom Pumafish and MediaTek Humufish

  Using channel intelligence, the report compares design teams, process nodes, packaging, SerDes, HBM configuration, and mass-production risks across the two TPU v9 designs and concludes MediaTek faces higher execution risk.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• MediaTek Inc. (2454.TW)

  Research target

  Strengths

  TPU v8 wins are effectively confirmed; the 2026 US$1bn+ ASIC revenue target is still considered achievable, and AI ASIC margins are clearly higher than some full CoT projects.

  Weaknesses

  TPU v9 win risk is rising, smartphone revenues are under pressure, and core business margins and near-term revenue growth remain weak.

  Comparison

  Compared with Broadcom, MediaTek may face disadvantages versus TPU v9 in SerDes IP, packaging pathway, and mass-production execution ability.

  Risks

  Humufish failing to ramp on time, Google selecting the Broadcom solution, further smartphone demand deterioration, and insufficient diversification of ASIC customers.

• Broadcom (AVGO)

  Primary TPU v9 competitor

  Strengths

  Long-term collaboration with Google's TPU lead design team, using TSMC N2P, 3DSoIC, and CoWoS-L, and possessing relatively strong internal IP capabilities.

  Weaknesses

  The report does not emphasize Broadcom weaknesses.

  Comparison

  The report sees TPU v9 project awards as more likely to be tilted toward Broadcom.

  Risks

  If Google maintains a multi-supplier strategy or MediaTek executes better than expected, Broadcom's relative share could fall below market expectations.

• Marvell Technology (MRVL)

  Potential new competitor

  Strengths

  May participate in Google's SRAM compute engine and gain opportunities in MAIA or similar programs.

  Weaknesses

  The report does not quantify its Google TPU share in detail.

  Comparison

  A new entrant could compress MediaTek's share of Google AI Compute spend and become a TPU v10 RFI competitor.

  Risks

  The project is still at an early stage, with uncertainty around customer allocation and ramp timing.

• TSMC / ASE / Substrate / advanced packaging equipment

  Cleaner AI Compute beneficiaries

  Strengths

  These names are expected to benefit from sustained EPS upgrades and are less dependent on a single binary design-win outcome.

  Weaknesses

  The report does not break out valuation and risk details for each name.

  Comparison

  Compared with MediaTek, the risk-reward is more straightforward and less dependent on a single TPU v9 win-or-lose event.

  Risks

  Changes in demand cadence for advanced process, CoWoS, and packaging could affect earnings realization.

Key data

• Current priceNT$1,790.00As of 2026-04-15.
• Target priceNT$1,600.00Dec-26 target price, based on SoTP valuation.
• RatingNeutralJPMorgan maintains a Neutral rating.
• 2027 earnings estimate adjustmentDown 2%Due to TPU v9 uncertainty and lower smartphone outlook.
• TPU v8 shipment estimate2026E 0.4mn / 2027E 1.5mn unitsThe report expects the first wave of TPU v8x, at least 300K units, to be shipped in 2H26, and the US$1bn+ revenue target to be achievable.
• Base-case TPU revenue2027E US$5.1bn / 2028E US$10.6bnCorresponds to MediaTek TPU shipments of 1.5mn / 1.85mn units, or roughly 20% share.
• Bull-case TPU revenue2027E US$8.8bn / 2028E US$25.3bnAssumes Humufish reaches about one-third TPU v9 share in 2028, with a 15% probability.
• Bear-case TPU revenue2027E US$4.2bn / 2028E US$6.1bnAssumes Humufish fails to ramp on time, with TPU v9 share around 13% in 2028.
• 2026 smartphone revenue outlookabout 10% year-over-year declineImpacted by weak China Android demand and memory price increases.

Impact & implications

The investment implication for MediaTek in this report is cautious: AI ASIC does provide long-term upside, but TPU v9 outcomes are highly binary, and the competitive landscape has widened from Broadcom to include potential participants such as Marvell. After risk adjustment, JPMorgan believes AI Compute-related beneficiaries such as TSMC, ASE, substrates, and advanced packaging equipment are more likely to reflect EPS upgrades with lower binary risk.

Risks

• TPU v9 design-win outcomes are highly binary, with Google potentially selecting only one solution for high-volume production.
• Execution complexity for MediaTek Humufish has risen materially from Zebrafish, involving four compute dies and 3D packaging, among other technical challenges.
• MediaTek's SerDes IP appears weaker than Broadcom's, and the Intel EMIB-T back-end packaging path carries greater execution risk.
• New SRAM compute engine designs and US fabless suppliers entering Google's AI Compute ecosystem could reduce MediaTek's wallet share.
• Although TPU v8 is viewed as manageable, it still may be affected by re-spins, TSMC N3 and CoWoS-S supply, SK Hynix HBM3e supply, and Google server board-level test execution.
• Weak China Android demand and higher memory prices could keep further revisions to smartphone shipments and MediaTek Mobile revenue under way.
• Second-cycle large CSP ASIC opportunities at AWS, Meta, Microsoft, and Tesla are intensely competitive, making near-term customer diversification difficult.

What to watch

• MediaTek's Q1 2026 results and guidance for Q2 2026 revenue, margins, and smartphone demand.
• Management commentary on achieving US$1bn+ ASIC revenue in 2026 and scaling to multiple billions in 2027.
• TPU v8x Zebrafish re-spin outcomes, 2H26 ramp progress on the first wave of at least 300K units, and the 2027 goal of 1.5mn units.
• Design lock, RFI/RFQ progress, and Google's mass-production selection between TPU v9 Humufish and Broadcom Pumafish.
• Progress of Broadcom Icefish and MediaTek and other second/third designs in Google's TPU v10 program.
• The impact of China Android demand and memory price increases on handset ASPs and shipment volumes.
• Whether TSMC N3, CoWoS-S, and HBM3e supply constraints limit TPU v8/v9 scaling.