MediaTek not only makes mobile chips? DENSO partnership opens up the automotive market, CPU concept stocks迎来转机

MediaTek (2454) short-term trend faces pressure. After continuous decline recently, a technical rebound has occurred. As of today’s close, the stock price rose 0.36% to NT$1,385, but the overall monthly performance remains within a range of NT$1,380 to NT$1,460, consolidating in a box pattern. Year-end institutional portfolio adjustments, high market volatility, and concerns over smartphone inventory have made this CPU concept stock difficult to improve recently, showing a special pattern of short-term consolidation and long-term transformation.

Why is the market continuously watching MediaTek? Where does the short-term pressure come from?

Currently, MediaTek faces two major short-term negatives. First, the market is closely watching the sales performance of flagship chips in early 2026, with uncertainty around upgrade demand. Second, year-end profit-taking by foreign investors and domestic fund managers has created a pressure on the shareholding structure, further dragging down the stock price.

However, from the perspective of P/E ratio, MediaTek’s current valuation is 20.74 times, reflecting some premiums for AI and automotive applications. Compared to traditional mobile chip companies, this level is not cheap; but within the framework of high-end AI ASIC peers at 25 to 30 times P/E, MediaTek still has room for valuation recovery.

The turning point lies in DENSO cooperation and business diversification—A new story for CPU concept stocks

MediaTek has long been labeled as a “mobile chip manufacturer,” with stock fluctuations often tied to global smartphone upgrade cycles. However, today (26th), it announced a deep collaboration with DENSO, a global automotive parts leader, to develop next-generation advanced driver-assistance systems (ADAS) and smart cockpit chips. This marks the official entry of this CPU concept stock into the automotive electronics field.

The core value of this strategic alliance lies in complementary advantages. MediaTek contributes its Dimensity Auto platform with high-performance computing and AI technology, while DENSO brings automotive-grade safety certification, system integration capabilities, and global automaker supply chain resources. These three advantages are key to breaking the stock’s consolidation pattern:

First, ISO 26262 functional safety certification
The customized SoC developed through cooperation will achieve safety certifications at ASIL-B/D levels, which is a hard threshold for entering mainstream global automakers. Compared to consumer chips, automotive chips require more rigorous validation, but once passed, they secure a long-term stable order base.

Second, multi-sensor fusion AI perception system
The new chip integrates AI/NPU accelerators and advanced image signal processors (ISP), supporting multi-sensor fusion of cameras, radar, and lidar. This capability directly enhances the accuracy of autonomous driving and driver-assistance systems, becoming a necessity for traditional automakers and new entrants in vehicle manufacturing.

Third, pre-verified platform for shortened time-to-market
Using pre-verified automotive-grade IP and AUTOSAR-compliant tools, it enables “plug-and-play” mass production, significantly shortening development cycles. This is highly attractive to automakers eager to capture the electric vehicle and smart cockpit markets.

2026: A watershed for MediaTek’s transformation from a mobile manufacturer to a multi-engine company

According to the latest institutional research and MediaTek’s investor conference, the company’s valuation logic is undergoing a qualitative change from a single business to multiple engines. CEO Cai Lixing expects automotive business to grow quarter by quarter in 2025. Although high-end chips like the N1X series will only see significant mass production after 2026, the collaboration with DENSO has already effectively secured long-term orders from major global automakers.

More importantly, MediaTek has explicitly guided that its AI ASIC (enterprise-level customized chips) business will contribute about US$1 billion (approximately NT$32 billion) in annual revenue by 2026. Benefiting from the dual growth engines of AI ASIC and flagship mobile chips, institutional investors are optimistic that MediaTek’s EPS may hit a new record high in 2026.

MediaTek’s stock price was once stuck in a P/E ratio of 15 to 18 for a long time, mainly due to the market’s over-focus on the cyclical risks of its mobile business. But as AI ASIC deployment takes shape and the automotive market opens up, the valuation recovery has gained momentum. Referencing peers like Broadcom and GlobalFoundries (KY), whose ASICs often trade at 25 to 30 times P/E, this CPU concept stock still has significant valuation upside.

Long-term diversification of engines has taken shape; short-term volatility is just a transition

In the short term, MediaTek’s stock price is affected by high market volatility and chipholder adjustments, making a technical pullback inevitable. But the long-term business diversification support has already formed: automotive electronics provide a stable revenue base, while AI ASIC offers explosive profit growth. The dual engines enable this company to break free from the cyclical constraints of the traditional mobile market.

The collaboration with DENSO will gradually shed the market’s “over-reliance on mobile” label. As long as the US$1 billion ASIC target in 2026 proceeds on schedule or exceeds expectations, this CPU concept stock is highly likely to break through the current box ceiling and initiate a new long-term upward trend of valuation re-rating.

By 2026, MediaTek will no longer just be a mobile chip manufacturer but a multi-engine platform driven by automotive and AI.