Company VP and president CJ Hsieh said that competition in the handset-IC market was cut-throat and it was unlikely that the company's gross margin is unlikely to rebound to 40 per cent as hoped.
Hsieh said that Media Tek operating costs will rise only 3-5 per cent in 2016.
For the first quarter of 2016, MediaTek's revenues are expected to fall 7-15 per cent to about $1.57 billion. Gross margin will range from 37 per cent to 40 per cent, Hsieh indicated.
MediaTek expects to ship a total of 100-150 million chips for smartphones in the first quarter of 2016. .
MediaTek's gross margin fell to 38.5 per cent in the fourth quarter of 2015, while net profits declined 47.5 per cent.
MediaTek reported consolidated revenues for the fourth quarter increased 8.3 per cent thanks to its acquisition of analog IC specialist Richtek Technology.
Revenues generated from MediaTek's smartphone- and tablet-use chips accounted for 55-60 per cent of the company's total revenues in the fourth quarter of 2015, followed by those from its home entertainment products with 30-35 per cent. Sales of MediaTek's IoT-related chips made up the remaining 10-15 per cent.
MediaTek's revenues for 2015 totaled $6.36 billion, rising 0.1 per cent, while gross margin slid o 43.2 per cent. The company had net profits of $77million in 2015, down 44.5%.
Hsieh noted that MediaTek's 16nm-made smartphone solutions will enter their mass production stage in the second half of 2016. Meanwhile, the company is set to roll out a new series built using a more-advanced 10nm process in the latter half of the year followed by volume production in early 2017, he said.
MediaTek's Helio-series chips targeted at the high-end smartphone market segment are expected to account for more than 20 per cent of MediaTek's total handset-IC shipments in 2016, up from only 8 per cent in 2015, according to Hsieh.