$5 Billion Flexible Financing Plan to Grab a Larger Slice of the Fast-growing AI Data Center Market, Betting on Data Center

MediaTek has approved a $5 billion flexible financing plan to grab a larger slice of the fast-growing AI data center market, betting on data center chips as its smartphone business cools. The chip designer aims to capture 15%–20% of the AI accelerator market by 2027, up from a prior target of 10%–15%, chief executive Rick Tsai said on an earnings call after second-quarter results. The funding will be tapped as needed to pursue long-term growth and strengthen the supply chain, he added, supporting expansion in AI ASIC chips, systems and platforms.

The company’s first custom AI data center chip will enter mass production in the fourth quarter. MediaTek expects the data center unit to generate more than $2 billion in revenue by end-2026, and its second-generation AI chip is slated for 2028. The financing gives the company flexibility to reserve advanced packaging capacity, secure wafer supply from manufacturing partners such as TSMC and speed up enterprise hardware development. The strategic shift comes as smartphone demand weakens. MediaTek’s mobile chip revenue fell 20% year-on-year in the second quarter, squeezed by rising component costs and softer global handset demand.