Good afternoon, everyone. Joining us today are Dr.

Rick Tsai, MediaTek CEO; and Mr. David Ku, MediaTek CFO.

Mr. Ku will report our second quarter results, and then Dr.

Tsai will provide our prepared remarks. After that, we will open for Q&A.

As a reminder, today's presentation will provide forward-looking statements based on our current expectations. The statements are subject to various risks and factors which may cause actual results to differ materially from these statements.

The presentation materials supplement non-TIFRS financial measures. Earnings distribution will be made in accordance with financial statements based on TIFRS.

For details, please refer to the safe harbor statement in our presentation slides. In addition, all contents provided in this teleconference are for your reference only, not intended for investment advice.

Neither MediaTek nor any of independent providers is responsible for your any actions taken in reliance on contents provided in today's call. Now, I would like to turn the call to our CFO, Mr.

David Ku, for the second quarter financial results.

Thank you, Jessie. Good afternoon, everyone.

Now, let's start with the 2026 second quarter financial results. The currency used here is NT dollar, and the average exchange rate for the second quarter was 31.6 to 1 US dollar.

Revenue for the quarter was NT$152.2 billion, up 2% sequentially and up 1.2% year-over-year. Gross margin for the quarter was 46.2%, down 0.1 percentage point from the previous quarter and down 2.9 percentage points from the year-ago quarter.

The year-over-year decrease was mainly due to a one-time benefit in the year-ago quarter. Operating expense for the quarter was NT$47.4 billion, compared with NT$46.2 billion in the previous quarter and NT$44.5 billion in the year-ago quarter.

Operating income for the quarter was NT$22.9 billion, down 0.1% sequentially and down 22.2% year-over-year. Non-TIFRS operating income for the quarter was NT$23.7 billion.

Operating margin for the quarter was 15%, down 0.3 percentage point in the previous quarter and down 4.5 percentage points year-over-year. Non-TIFRS operating margin for the quarter was 15.6%.

Net income for the quarter was NT$24.6 billion, up 0.9% sequentially and down 12.3% year-over-year. Non-TIFRS net income for the quarter was NT$25.3 billion.

Net profit margin for the quarter was 16.2%, down 0.1 percentage point from the previous quarter and down 2.5 percentage points year-over-year. Non-TIFRS net profit margin for the quarter was 16.6%.

EPS for the quarter was NT$15.28, up from NT$15.17 in the previous quarter and down from NT$17.50 in the year-ago quarter. Non-TIFRS EPS for the quarter was NT$15.71.

A reconciliation table for our TIFRS and non-TIFRS financial measures is attached in our press release for your information. That concludes my comments.

Thank you.

Thank you, David. Now, I would like to turn the call to our CEO, Dr.

Rick Tsai, for prepared remarks.

Good afternoon, everyone. Thank you for joining us today.

MediaTek second quarter revenue achieved NT$152 billion, exceeding the high end of our guidance range, primarily driven by solid business momentum across smart edge platforms products. Second quarter gross margin was around the midpoint of our guidance range, in line with our expectation.

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 and edge AI. 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 data centers and the proliferation of agentic AI experiences across a broad range of edge devices. In data center, demand for customized solutions to pursue optimized performance per TCO and performance per watt at scale remains strong.

Through close partnership with major US [cough] CSP customers, we have successfully built our first AI accelerator ASIC with leading performance. Production of this product is scheduled to begin in the fourth quarter of this year.

We expect our data center revenue to exceed $2 billion in 2026 and will continue to scale substantially in 2027, primarily driven by increasing customer demand for our solution with superior TCO. With that, we now believe the 2027 SAM to be $80 billion US dollars, and we are raising our share target to 15% to 20%, from 10% to 15% that we guided last quarter.

Meanwhile, our second AI accelerator ASIC is progressing well with a meaningful upgrade in compute performance with further optimized TCO. Additionally, 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 are confident in capturing additional market share when this ASIC ramps up. Furthermore, we continue to deepen our engagements with several customers for data center ASIC opportunities.

Backed by our industry-leading IP, deep ecosystem partnerships, and proven execution capabilities, we believe we can secure more design wins in the data center market. Building on our industry-leading IP portfolio, we offer best-in-class, pre-validated subsystem solutions for memory, I/O, and connectivity.

This largely reduces design complexity and shortens time-to-market for our data center customers to scale from AI ASIC chips to full-scale system and platform deployments. In addition, our development of 448G SerDes is progressing well, delivering best-in-class performance and power with our co-packaged copper system solution.

Looking beyond 448G, we continue to develop CPO system solutions on TSMC's COUPE platform to enable next-generation system connectivity. In addition, we offer end-to-end 3.5D platform with best-in-class 3.5D IP, packaging, and design flows for large data center design on 3.5D.

Furthermore, we serve as a major enabler for data center customers in this increasingly complex global supply chain environment. Through deep design-technology co-optimization, DTCO, with TSMC and close collaboration with key advanced packaging partners, we leverage our experience in advanced node design, such as 2-nanometer, and strong engineering and architecture capabilities to develop high-performance ASIC across a broad range of very large chip sizes using CoWoS and EMIB technologies.

We also create significant value beyond semiconductor by orchestrating other key components throughout the supply chain, such as memory and substrate, to drive successful execution. Looking ahead, as data center architectures and broader semiconductor ecosystem continue to evolve rapidly, we are confident in our ability to support our data center customers' innovative roadmap as their trusted, long-term partner.

With that, I will now talk about the recent business performance for our three revenue groups. In the second quarter, mobile phone declined 14% quarter-over-quarter and 20% year-over-year, primarily due to weak demand as a result of increasing smartphone BOM costs.

Mobile phone accounted for 41% of total revenue in the second quarter. Our view for global smartphone shipment remains unchanged, and we continue to expect the market to decline by about mid-single-digit percentage in units this year.

Specifically, we have observed that customers are prioritizing both flagship products with differentiated user experiences and entry-level products for price-conscious demand. For the flagship segment, we will launch our 2-nanometer SoC in the third quarter to power customers' next-generation agentic AI models.

The SoC delivers strong agentic AI computation with a step-up in user experience at a more efficient cost structure. Together with ongoing engagements with global players, we will increase our presence continuously in the flagship smartphone market in 2027.

For the entry segment, we continue to support customers with our leading SoC portfolio and memory utilization technology to optimize their cost structures. As rising costs across the supply chain have become an industry-wide reality, we are taking pricing actions to ensure these increases are appropriately reflected in our product pricing.

For the third quarter, we expect mobile phone revenue to be flat to decline mid-single-digit percentages sequentially as the ramp of our flagship SoC is expected to largely offset weakness in other segments. Moving on to smart edge platforms.

In the second quarter, this group grew 19% quarter-over-quarter and grew 26% year-over-year, accounting for 53% of total revenue. The sequential growth was primarily driven by our continued market share gains across connectivity, computing, and automotive products, as well as contribution from DRAM content in TV SoC.

Our strength in advanced computing and connectivity continue to help us gain shares in multiple areas. During Computex this year, we announced our collaboration with NVIDIA on RTX AI PC, a new class of Windows PCs built for agentic AI applications and the best-in-class graphics capabilities.

The products will be on shelf for the holiday season this year. This represents a meaningful step in broadening our computing businesses and a strong validation of our capabilities in high-performance CPU system integration.

For the third quarter, several new connectivity and automotive projects are scheduled to enter mass production. We expect smart edge platforms revenue to grow mid to high-single-digit percentages sequentially.

Moving on to power IC, this group accounted for 6% of total revenue in the second quarter and grew 11% quarter-over-quarter and 6% year-over-year. The revenue strength in the second quarter was mainly from share gains in computing and data center businesses.

For the third quarter, we expect power IC revenue to be flattish sequentially. Moving to the guidance.

In the third quarter of 2026, we expect the revenue growth from smart edge platforms to offset the weakness in mobile phone, and gross margin to be within the current range. We expect our third quarter revenue to be in the range of NT$152.2 billion to NT$159.8 billion, flat to up 5% sequentially and up 7% to 12% year-over-year, at a forecasted exchange rate of NT$32 to $1 US dollar.

Gross margin is forecasted at 46%, plus or minus 1.5 percentage points, and operating expense ratio is forecasted at 31%, plus or minus 2 percentage points. With that, we now aim to achieve the high end of our full-year revenue target range, which is high-single-digit percentage growth in US dollars.

For gross margin, through our disciplined pricing strategy that reflects the rising costs throughout the supply chain, we aim to deliver our full-year gross margin within the current quarter guidance range. To secure supply chain capacity and fuel our strategic expansion from AI ASIC chips to full-scale systems and platforms, the board has approved a discretionary $5 billion US dollars financing budget today.

This flexible framework provides us with optionality when needed to agilely support our long-term growth and capitalize on massive data center opportunities. In summary, we will continue to focus on executing our growth strategy across both edge and cloud AI.

Supported by our technology leadership, broad portfolio, and strong ecosystem partnerships, we believe we are well positioned to deliver sustainable, long-term value for our shareholders. This concludes my prepared remarks.

Thank you.

Thank you, Rick. Operator, we are now ready for Q&A.

Can we please have the first question?

Good afternoon, Rick, David, and Jessie. Thank you for taking my question.

I think, Rick, you mentioned your second-generation ASIC is on progress for mass production in 2028. Could you talk a little bit about how does it influence your SAM estimate?

I think you've already updated your SAM to $80 billion in 2027. As this project starts to ramp up, how does the SAM start to look like?

Definitely feels like the compute component within that chip is much bigger than the first generation that you're going to ramp in the next quarter. Could you also talk a little bit about how much market share can you take within this family of projects given that you seem to have some confidence that the market share will continue to expand?

Can you potentially be the majority source within this larger customer when it comes to 2028, 2029 kind of time frame? That's my first question.

Thank you, Gokul. Understand your question.

I think, first, I want to point out that the second ASIC certainly is much more powerful chip from both performance per TCO and performance per watt point of view. While we are not ready today to guide 2028 revenue range through the SAM yet, but we are certainly confident our 2028 SAM will be quite a bit higher than 2027.

Our share, because of also the strong capability demonstrated by our first ASIC, and in 2028 and then we are looking forward to both the first ASIC and the second ASIC to be in production in the same year, and that we believe certainly will enhance our market share well, I would say, in a very significant manner. Thank you.

Do you see any line of sight into you becoming a majority source for your customer, or you still think that you will be the smaller vendor when we think about the next couple of generations?

Gokul, we are not going into this because we know there are a lot of, shall we say, reports in the market. What we are doing basically, as we have always been doing, is to stay on the ground, to solidly execute what we have committed to our customer, as we have, and continuous building a very strong trust between us and the customer.

As such, we believe we will get our hopefully, better than fair share of the market share. That's really what we are doing, and we will continue execute that way.

Thank you.

Got it. Thank you very much, Rick.

Second question is on your 448G 2-nanometer-based SerDes. Could you give us a little bit more color on where we are in that process, like when do we have the IP ready to kind of talk to your customers, given I think the third generation of this family of ASICs is kind of right now seems to be in RFQ stage?

Any other IPs that you are kind of putting forth to the customer, in addition to the strong supply chain support that you have, when it comes to the key enablers for the next project which is in discussion? Thank you.

Well,

400G or 448G SerDes IP is really going well. We certainly expect that to be ready sometime in the next year, maybe second half of next year.

We were having a kind of middle-of-the-road SerDes not already well proven, I can say that. We have certainly very, I would say, really at least equivalent industry-leading D2D IPs in terms of performance and power consumption.

However, that's some IPs we are also providing leading-edge packaging technology capabilities for very large chip size applications. In addition, our team, I think, is working with some other key partners to put all those IPs together, as I mentioned in my text, a subsystem with which are maybe some different data center customers can use because those chips are all very complex and people want to go to the system level as soon as they can, but we can provide a time-to-market need to the customers, some different customers.

I think, compared to, say, a year ago or not to mention two years ago, the company is moving into not only provide very competitive IPs, but also integration of those IPs into a chassis format, the customers or various customer can utilize for fast time-to-market and to achieve their complex design. Thank you.

Thank you very much. Thank you.

Good afternoon. Thank you for taking my questions, and congrats on the very steady progress, especially for the cloud ASIC side.

My first question is I want to follow up for the second cloud ASIC project. One is in terms of the timeline for mass production, should we be looking at early 2028?

Also, how should we think about the execution? You mentioned pretty steady progress, but I guess the market has some questions around tape-out schedule, whether it's on track for Q4 this year.

Also, how should we think about Intel EMIB?

Yes, you can assume early 2028 for early production for second chip. The progress both in design, tape-out date, are on track.

We are working really closely with our customers, especially with the experiences we both have learned during the first chip, and we really know even more how to leverage each other's capability in getting the design out on time. I'm quite comfortable with that.

The back-end technology, the packaging technology, of course, is another key component of the whole complex ASIC chip. We work really, again, also well, probably more than closely with our supplier in mainly in ensuring the yields from the substrate vendors continue to improve very well, the supply of the capacity, the cycle time from our supplier.

We're working on all those down to the operation details. While those technologies are very challenging, we all understand that.

Those challenging technology are also the ones that will enable the great performance per watt and per TCO for that chip, and we are, I think, on way to make that happen. Thank you.

Thank you. Sorry, maybe just to follow up on a bit more color regarding EMIB.

I definitely feel that today you are sounding a bit more constructive, even more than a quarter ago. Recently, like earlier this week, Unimicron in Taiwan, the substrate maker there, also sounding more committed regarding EMIB.

Can we conclude that overall EMIB technology is making good progress in terms of the yield rate improvement and also the technology maturity for mass production for 2028?

Yes, in short, yes, you can, Sunny. I think you're saying that probably better than I am.

Thank you.

No problem. Thank you very much.

My second question would be to follow up on your announcement regarding this $5 billion US dollars for financing budget regarding the supply chain. Would you be able to provide a bit more color on what you are going to do?

Are you going to support some of the expansions from your key suppliers? Some of the key areas that you are looking to put into the investment?

How should we think about that support that just came out?

Sunny. It's David here.

I think first of all, I need to start with we have a very strong balance sheet. Currently, we actually have ample cash, $7 billion plus, on our balance sheet.

As you guy can see right now, the industry is moving very fast, especially for two elements. One is the whole supply chain situation, and also the possibility for different AI ASIC business models.

What we get from our board today is surely just optionality, a flexible plan, a financing budget plan when we need it. We can actually just power it up when we need it on top of our strong balance sheet.

I think that's the general idea.

Should we take that as a possibility that you can further strengthen relationship with key suppliers by maybe supporting their expansion?

Yes. Yes.

Got it. Okay.

Thank you.

Yes. Thanks.

Good afternoon. Thanks for taking my questions, and congrats on the very great results.

First question is just on ASIC. You updated your expectation for data center sales contribution to be more than $2 billion US dollars this year and raised the related TAM to $80 billion in 2027.

Would you be able to share more detail if it is mainly driven by single projects or includes the other parts of the NRE contribution from other projects? If you are going to see further upside on this market expansion if you can secure more capacity support from your supply chain partners?

Thank you.

I think that's our first project. Currently, based on the supply chain situation, we feel comfortable to provide that capacity for the whole supply chain, which including the foundry, the substrate, and also our customer side, the memory.

I think supply chain for the revenue target, both for this year and also for next year, I think we feel very comfortable.

Okay. Yeah.

I think just a quick follow-up to this one is that if you can define the boundary of the TAM. Is it just custom AI accelerator only, or does it include other content like CPU or network switch?

Right now, it's accelerator only. For now, yes, our SAM estimate.

Okay. So $80 billion only includes AI accelerator.

No HBM.

Okay. Got it.

Second question is just regarding on your ASIC pipeline. You just mentioned in your prepared remarks that you are engaged with several customers.

I think this is probably the first time you mentioned that you are engaged with several customers. Would you be able to share more detail on this, whether this just is more focused on Tier 1 hyperscalers or you are diversifying to Tier 2 hyperscalers and also enterprises as well?

When can we expect more design or manufacturing contribution from the other parts of the project? Thank you.

There are several initiatives and projects going on, but unfortunately, we won't be able to provide details right now. I think we will provide detail when we're allowed to talk about that.

Okay. Yeah.

Thank you. I'll be back in the queue.

Laura, we cannot hear you clearly. We can't hear you.

Can you speak up a little bit? Okay.

We can't hear you.

Yes. Is it better now?

Slightly better,

but

background noise and very remote.

Sorry. Thank you very much for Rick to give us quite details about the technology [unclear], etc.

I'm just wondering that for these new high technologies, including cross-sub memories or CPO, etc., does that go with the second project of your ASIC or other potential engagement with other customers? That's my first question.

I'm afraid we cannot disclose those details. What I can say is this technology, be they a different form of memory or memory on silicon, or CPC, CPO, we firmly believe these are the technologies that we need and also the whole industry needs to move into the next generations XPU, AI accelerator.

It's a matter of time. What the company is doing is to invest heavily in building these capabilities, while we also continue to hire many key talents in order to make that happen.

Thank you.

Thank you. Also just wondering, I understand that for the first accelerator, [unclear].

I'm just wondering that because of now company have much better visibility in terms of the component supply chain side, would you see that there will be more market share potential also the first-generation product for next year? Also, I recall last time we talked about that the potential is lower than 20%, meaning that customer can contribute more of the dollar content for a accelerator.

Are we have any expectation of our potential market share or the revenue contribution from this? Thank you.

We certainly believe there is demand both in 2027 and 2028, strong demand for chips that we're building. That we're also as I said just earlier, we are doing a very solid execution job.

What we know right now, for sure, what we have said earlier. You can be assured that we are working with our supply chain partners and our customers and, of course, our own people to fulfill any and all the demand from customers in both years ahead.

Thank you.

Next one, we have

Hi. Good afternoon, Rick, David, and Jessie.

Congrats for very solid and strong outlook for the ASIC and also more content value for the next generation. My first question regarding for the AI ASIC, I think in pre-Computex analyst event, MediaTek showcased you guys have the rack design solution as well.

I just wonder is there anytime soon we can see any contribution or any timeline we can see the contribution that you have more meaningful revenue contribution from your currently rack design service? That's my first question.

Yes. We are, I think, further advanced now in building what we said a pre-validated subsystem, or I would say, similarly, a rack design.

Actually, we are having our own IPs, be they SerDes, D2D, or with 3.5D packaging. Together also, we are incorporating NVLink Fusion connectivity onto the subsystem.

We believe this can be very attractive for various kind of needs from different CSPs or enterprise customers, potentially. Things are ongoing.

We are talking to potential customers with that in offer. We will provide more details when time is right.

Thank you.

Okay. My second question regarding to the price action.

You mentioned you guys going to take the price action to reflect the value and also inflate cost. In terms of the gross margin guidance, it's pretty much flattish or at current level.

Is that just reflect the passing through the cost, or do we expect more positive trend in the next few quarters to reflect on the margin side based on your price action? Is that possible to rank by your three different segment, which one will have the largest price hike by category?

Thanks.

I think for passing through the supply chain cost increases of our customers, I think the objective is really just to get the whole industry to share the whole supply chain ecosystem situation. We are not trying to actually increase the price to increase the gross margin.

The goal is really to passing through the cost pressure and share with our customer. For gross margin, the goal is actually just trying to maintain the gross margin, rather than increase the gross margin.

I think that's not our direct objective.

Okay. Is that possible to rank by the three business units, which one probably will see the higher price hike?

For that one, we won't be able to comment.

Okay.

In general, it should be pretty fair to all different business units because, again, the supply chain cost up is actually pretty universal across all segments and nodes in general.

Understood. Thanks.

Hi. Good afternoon, and thanks for taking my question, and congrats for a very good execution and outlook.

Rick, David, maybe first question is a bit follow-up on this kind of foundry supply chain. Do you think you need TSMC's CoWoS to back up your second-generation projects?

Or it seems like the current EMIB is working pretty well, right? Do you still need that backup and need to book capacity at TSMC earlier?

For the third generation, I believe you are also have some engagement, right? Do you think at that generation, you would consider to move back to TSMC's, for example, CoWoS larger reticle size?

Thank you.

First thing first, I think for the third generation is actually we won't be able to comment. I would say right now, probably let's focus on the next two years, 2027 and also 2028, even though we do believe the current two projects will provide pretty strong growth and also will keep us busy, okay, for the next few years.

In terms of packaging technology backup, I think we always working on different packaging technology. Sometimes switching sort of the second technology will take time.

Right now, given all the positive upgrading and also the result from the second projects, we're confident that actually we're going to deliver this on time and start to have the volume production in 2028. I think that's the current plan.

Got it. Thanks, David.

My second topic is always on this AI smartphone side, right? Again, Rick or David, do you think going forward there will be kind of significant change of the chip design, the way of the chip design, or the smartphone business model given the AI?

For example, we learned that your smartphone SoC competitor is introducing very, very aggressive wafer-on-wafer sort of packaging, they can include more memory for a smartphone SoC, as an example one. Secondly, regarding business model, do you think in the future, you need to do some custom chip for LLM customer?

At some point, actually, the hardware could be subsidized, and the volume for the smartphone, AI smartphone, will ramp up. Because over the past three years, we have been trying to upgrade the hardware, but AI smartphone doesn't really take off, right?

I'm wondering whether there could be any business model change to stimulate the AI smartphone demand. Thank you.

I think AI smartphone business, yes, you're right to talk about the last 2, 3 years. What we believe is now, at least in China market, you can see there's already a pretty major shift.

For instance, I think a good example is the ByteDance's Doubao model. I think it's running very, very popularly in China market.

That, I think the example like that will drive, I think, the coming years of chip design. Saying all that, however, we have to also bear in mind the cost of the chip or we have to balance the need of the compute capability and the cost of the chip.

We look at that architecture that is a architecture question. We look at the various architecture and try to decide from this generation next to further one, whether we can build a chip with very, very, very good computing capability to meet most, many, if not most, of the agentic AI requirements for the model makers, but also still at a cost structure that our OEM customers can still have their good business.

This is a very dynamic environment. We work on those technologies, but we want to also make sure our customers can still do very well with our chips financially.

Thank you.

Thank you. Rick, are you comfortable to talk about future opportunity outside of China with LLM provider?

Because as one of the leading LLM vendor, they hired lots of ex-Apple designers, technology leaders. I feel like this kind of AI smartphone is kind of not just about China.

It's kind of a global phenomenon. Are you okay to talk about the business opportunity there?

I can certainly comment in a more generic manner. We are certainly seeing a various and I do mean various potential customer and customers who are working on I would say probably different formats of the edge devices to meet or enjoy this agentic AI era.

I think the jury is definitely still out as to which format will win, or maybe more than one format. We do not know for sure, but what we do know is that we have this capability in building the most power-efficient and high computing capability SoC chips to serve different needs.

At the end of the day, we have those fundamental architecture capability and computing system capability and, of course, the leading-edge process capabilities, though the combination of which will satisfy, I would say, all of those demands from various formats and customers. Thank you.

Great. Thank you.

Thanks, David. Thanks, Rick.

Very helpful. Thanks.

Hi. Thanks for taking my question.

One of your competitors announced something called HMC, which is basically using LPDDR instead of HBM. Are you seeing any customers pursuing that kind of line?

Similarly, on the tech roadmap, beyond 448-gig SerDes, do you see any roadmap? It doesn't seem like there is any sort of copper-driven roadmap out there from your main competitor.

Do you see a potential to go up to higher speeds than SerDes, or is that kind of the end of the road? Thanks.

I think for the data center, I understand actually there are several different approach trying to replace HBM due to the supply issue. Far, based on what we see for the hyperscalers who actually require the absolutely high performance, I think HBM is still the must.

For the segment we're aiming on right now, we still believe HBM will be the mainstream, at least for the near term.

On the SerDes?

I think SerDes right now, actually, for the 4 448 that tape out on schedule, I think for the next generations, for beyond that, most likely we need to go on the optical. The optical side, we are working on that as well, and we have a product roadmap which are in line and on schedule.

Which is actually all what we update earlier, yes.

Got it. Thanks a lot.

Thank you. Thank you for taking my question.

My first question is actually also surround the AI ASIC. You mentioned last call that the next-generation substrate actually carries more value and higher pricing, but does that necessarily translate into a higher gross margin than first project?

How wide is that gap of gross margin versus corporate average for the second-generation project?

I think in general, the gross margin, generation after generation will be similar, okay, will not be higher. The dollar value and the scale will be much bigger.

Compared to the corporate average, that's the same guidance we provide earlier, will be slightly dilutive compared to the current corporate gross margin. On the operating margin side, once we start to scale, I think it will be accretive and meaningfully and sizeably.

Thank you. Actually, my second question is follow-up on that because I think since day one, you've mentioned that this is operating margin accretive.

How should we think about the magnitude of that accretion? On OpEx specifically, should we expect absolute OpEx dollar growth into 2027 and even in 2028 to run at a similar pace as we've seen versus past few years?

I think for the OpEx ratio, due to the revenue grow strongly, I think the OpEx ratio will definitely coming down substantially. In terms of absolute dollar, because we are still investing on so many new technologies, I think will actually increase slightly.

The ratio will come down substantially. In terms of operating margin accretive, we will probably show that during the third quarter.

I think once we's get more clear for the overall operation plan, we will provide some guidance. Right now, actually, we probably only provide the directional guidance rather than the number guidance.

Got it. Is it fair that we assume the dollar-wise, OpEx dollar will grow higher versus

Will grow higher. The ratio will come down, yeah.

Got it. Thank you.

Ladies and gentlemen, this concludes MediaTek 2026 second quarter conference call. An audio replay will be available in 1 hour after the call at the Investor section of MediaTek's website.

We'd like to thank you for your participation, and you may now disconnect.