Good afternoon, everyone. Joining us today are Dr.

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

Mr. Ku will report our fourth 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 the 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 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 fourth quarter financial results.

Thank you, Jessie. Good afternoon, everyone.

Now, let's start with the 2025 fourth quarter financial results. The currency used here is NT dollar.

The foreign exchange rate applied to the quarter was NT$31.1 to US$1. Compared with our fourth quarter guidance of 30.6 and the third quarter foreign exchange rate of 30.2.

With that, revenue for the quarter was $150.2 billion, up 5.7% sequentially and up 8.8% year-over-year. Full year 2025 revenue totaled $596 billion, up 12.3% from the previous year.

Gross margin for the quarter was 46.1%, down 0.4 percentage points from the previous quarter and down 2.4 percentage points from the year-ago quarter. Gross margin for 2025 was 47.5%, down 2.1 percentage points year-over-year.

Operating expense for the quarter was $47.4 billion, compared with $43.9 billion in the previous quarter and $45.6 billion in the year-ago quarter. Full year 2025 operating expense was $179.6 billion, compared with $161 billion in 2024.

Operating income for the quarter was $21.9 billion, down 1.5% sequentially and up 2% year-over-year. Non-TIFRS operating income for the quarter was $22.5 billion.

Full year 2025 operating income was $103.5 billion, up 1% year-over-year. Non-TIFRS operating income for the year was $106 billion.

Operating margin for the quarter was 14.5%, down 1.1 percentage points in the previous quarter and down 1 percentage point year-over-year. Non-TIFRS operating margin for the quarter was 15%.

Operating margin for 2025 was 17.4%, down 1.9 percentage points year-over-year. Non-TIFRS operating margin for the year was 17.8%.

Net income for the quarter was $23.1 billion, down 9.3% sequentially and down 3.6% year-over-year. Non-TIFRS net income for the quarter was $23.6 billion.

Full year 2025 net income was $106.1 billion, down 1% year-over-year. Non-TIFRS net income for the year was $108.2 billion.

Net profit margin for the quarter was 15.4%, down 2.5 percentage points from the previous quarter and down 1.9 percentage points year-over-year. Non-TIFRS net profit margin for the quarter was 15.7%.

Net profit margin for 2025 was 17.8%, down 2.4 percentage points year-over-year. Non-TIFRS net profit margin for the year was 18.2%.

EPS for the quarter was $14.39, down from $15.84 in the previous quarter and down from $14.95 in the previous quarter. Non-TIFRS EPS for the quarter was $14.71.

Full year 2025 EPS was $66.16, compared with $66.92 in 2024. Non-TIFRS EPS for this year was $67.46.

A reconciliation table for our TIFRS and non-TIFRS financial measurement is attached in our press release for your reference, and that concludes my comments. Thank you.

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

Rick Tsai, for our prepared remarks.

Good afternoon, everyone. Thank you for joining us.

I'm pleased to report that our fourth quarter revenue reached NT$150.2 billion, which came in at the high end of our guidance range, thanks to a more favorable foreign exchange rate and better demand for smart edge products. For full year 2025, MediaTek revenue was NT$596 billion, up 12.3% year-over-year, or US$19.1 billion, up 15.6% year-over-year, registering another year of record revenue.

I believe this milestone underscores MediaTek's resilience in navigating a dynamic global economic environment, the strong support and confidence from our customers and partners, and the strength of our leading technology and IP roadmap that has laid the foundation for our growth. MediaTek's 2025 revenue growth was mainly driven by global share gains of our flagship and premium edge AI Dimensity chips, as well as our industry-leading connectivity solutions, including Wi-Fi 7, 5G modem, and 10G PON.

We stand firmly as a market share leader across many categories, such as smartphone, tablets, Chromebook, TV, and broadband connectivity. Meanwhile, we continued to make very solid progress in technology development and business expansion into new growth areas.

For example, we were one of few companies completing 2-nanometer tape-out at TSMC. We worked with partners to enable the world's first Release 19 5G-Advanced NR-NTN connection over OneWeb LEO satellite.

We've successfully expanded our project pipeline for data center ASIC and automotive platforms. We also started to register revenue for high-performance computing products, such as GB10, that we co-developed with NVIDIA for its DGX Spark AI supercomputers.

Looking ahead to 2026, as ubiquitous AI continues to push the boundary for more efficient computation and AI applications, we believe MediaTek will continue to thrive on those growth opportunities. In data center, demand has been increasing rapidly.

We are very confident in achieving data center ASIC revenue of more than US$1 billion in 2026 and multiple billion US dollars in 2027. Furthermore, we're fully committed to executing a follow-on project in our pipeline, with revenue starting in 2028.

For MediaTek to strengthen our position as a trusted partner for data center customers, we are accelerating investments on several key fronts. Firstly, we have consolidated internal R&D resources and increased external hires for data center AI system architecture, critical IP development, and advanced technologies.

With these efforts, we have demonstrated strong capabilities in architecting high-performance, heterogeneous compute systems on advanced process nodes, as well as implementing advanced packaging technologies that deliver meaningful PPA improvements and enhance power density for custom data center solutions. In addition, to support our long-term growth and capture emerging market opportunities, we continue to invest in several key technologies, including high-speed 400G SerDes, co-packaged optics solutions, 3.5D packaging, custom HBM, and integrated voltage regulators, IVR.

We believe these strategic investments will further enhance our technology roadmap to support customers' evolving requirements. In automotive, our scalable Dimensity Auto cockpit platforms, telematics solutions, and power IC continue to gain share globally.

In addition, we are making an inroad into ADAS by partnering with DENSO, one of world's leading automotive technology providers, to co-develop custom ADAS chips. The solution will combine DENSO's automotive-grade safety expertise and deep vehicle integration with MediaTek's efficient, high-performance SOCs and AI capabilities to offer a scalable platform for next-generation driver assistance.

We expect significant revenue growth from our automotive solutions in 2026. Our computing solutions, which include tablet, Chromebook, the GB10 project for DGX Spark that we collaborate with NVIDIA, grew more than 80% in 2025 to US$1 billion, driven by strong AI adoption and share gains.

We have observed very positive feedback for NVIDIA's DGX Spark, and we expect its revenue growth to accelerate into 2026. With AI serving as a catalyst for industry expansion and driving the surge in demand, the global supply chain is facing challenges in fully meeting the increasing needs in 2026, resulting in higher costs across the supply chain.

We have secured the capacity required to support MediaTek's growth in data center ASIC and other areas. We will also adjust our pricings to reflect the rising supply chain cost and allocate our supply across products based on the overall profitability.

We believe 2026 will continue to be a year where MediaTek's business growth is supported by the AI megatrend. Building on the solid foundation, we will continue to invest in critical technologies, including 5G satellite, 6G, advanced process nodes, and advanced packaging for both edge AI and cloud AI solutions to capture growth opportunities ahead.

With that, now let me talk about the recent business performance for our three revenue groups. Our fourth quarter mobile phone revenue grew 18% quarter-over-quarter and 8% year-over-year in NT dollar, achieving record-high quarterly revenue and accounting for 59% of total revenue.

This was driven by the successful ramps of our flagship SOC, Dimensity 9500, as well as our premium SOC, Dimensity 8500. For the year 2025, MediaTek's mobile phone business grew 8% year-over-year in US dollar, surpassing US$10 billion in revenue and achieving a record high.

Within this, flagship SOCs exhibited robust growth and contributed $3 billion in revenue. These results strongly demonstrate the widespread recognition and market position the MediaTek Dimensity platform has successfully established.

For 2026, under the pressure of increasing memory and BOM cost, we expect overall smartphone end demand to be negatively impacted. We will work closely with our customers to strategically adjust the product portfolio in order to mitigate the impact.

For the first quarter of 2026, we expect mobile phone revenue to decline significantly quarter-over-quarter. Moving on to smart edge platforms.

In the fourth quarter, this group declined 8% quarter-over-quarter and grew 13% year-over-year in NT dollar, accounting for 37% of total revenue. The sequential decline was due to consumer electronics seasonality, whereas the year-over-year growth was mainly driven by share gains in high-end tablets powered by our Dimensity 8000 and 9000 series.

In 2025, smart edge platforms grew 21% year-over-year in US dollar, benefiting from market's continuous adoption of AI and faster connectivity, as well as our global share gains. For example, our connectivity revenue grew strongly and exceeded US$3 billion in 2025, with Wi-Fi 7 revenue tripling and 5G modem doubling.

We anticipate these positive trends to extend into 2026. Even without factoring in the expected data center ASIC revenue, our smart edge platforms revenue is still expected to grow healthily this year, demonstrating the structural strength across our business portfolio.

In 2026, in addition to the exciting growth opportunities from data center, auto, and computing that I mentioned earlier, we also expect higher adoption of AI and faster connectivity to continue across applications. We are once again at the forefront of technology upgrades, with our industry-leading Wi-Fi 8 solutions unveiled at CES this year, and we expect early customer adoptions toward the end of the year.

For the first quarter of 2026, we expect our smart edge products to grow sequentially and year-over-year, as several products, such as connectivity, TV, and computing devices, recover from the low seasonality. Moving on to power IC.

This group accounted for 5% of total revenue in the fourth quarter and was down 8% quarter-over-quarter and 11% year-over-year. The sequential decline is due to consumer electronics seasonality, while automotive and industrial grew in the quarter.

In the first quarter of 2026, we expect power IC revenue to be flattish. Moving to the guidance.

In the first quarter of 2026, we expect the recovery of smart edge platforms will partially offset the sequential decline of mobile phone. We further expect our first quarter revenue to be in the range of NT$141.2 billion to NT$150.2 billion, flat to decline 6% sequentially and down 2% to 8% year-over-year at a forecasted exchange rate of NT$31.2 to US$1.

Gross margin is forecasted at 46%, plus or minus 1.5 percentage points. Quarterly operating expense ratio to be at 31%, plus or minus 2 percentage points.

In closing, we believe 2026 will be a year where MediaTek's business growth is supported by the AI megatrend. Meanwhile, we aim to protect our profitability through disciplined pricing and strategic capacity allocation.

We will also remain fully focused on execution and collaborate closely with our global supply chain partners. With the vast opportunities brought by ubiquitous AI ahead, we firmly believe we are on the right track of our mid- to long-term growth journey.

This concludes my prepared remarks. Thank you.

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

May we please have the first question?

Good afternoon. Thank you very much for taking my questions.

To kick off, first question on cloud ASIC. In recent few months, cloud ASIC demand appeared to continue to strengthen.

With that, should we expect upside for your total addressable market estimate of $50 billion by 2028 and your market share target of 10% to 15%?

I believe we shared about $50 billion TAM last time, and 10% to 15% market share. We do not have a really formal reestimate of this market size, but I strongly believe it's safe to go up by $20 billion, for instance, about $50 to $70 billion.

I think that's without really a detailed analysis, but that's my estimate. Thank you.

Right. Sorry, just to clarify, given people really pay attention to your guidance, and so let's say if addressable market is up to $70 billion in 2028, and you still aim for 10% to 15% type of market share, or you think could be higher given the progress made in recent few months?

I think 2028, tell the truth, a bit farther. We have ideas, but I think let me say 10% to 15% is rather safe estimate.

We certainly strive to go higher.

Got it. Then my second question is to follow up on the business model for cloud ASIC.

Maybe one is, David, if you could help us understand, going to 2027, when you scale the ASIC shipment, how should we think about the incremental opex increase? Given now we are into the ramp, could you also give us an update on gross margin, also op margin profile for the project?

I'll probably start with the opex. I think opex ratio, which is scaled into revenue, so far for the full year, also for next year, I think we are looking for the flattish.

The ratio should be similar. Given the fact that revenue will grow, the opex dollar will continue to increase.

We will basically invest more, like I think Rick, our CEO, explained, going to invest more for all key technologies. Profitability-wise, I think that's the same approach.

I think overall, due to the mix of different business model and also accounting principle, the better way to think about that, especially for 2027 when we start to ramp, is you're going to see operating margin accretive. I think that's probably the best way to think about that, yes.

Got it. Thank you.

Sorry, maybe one last follow-up. Since you mentioned you have already secured the next-generation cloud ASIC project, how should we think about your value-add, your content, and then also competition evolving into the next generation?

Thank you very much.

The next-generation products certainly is quite a bit more complex in just about every aspect. We have demonstrated our capability to elevate our technology and IP capabilities convincingly to our customers.

Also on top of that, our execution capability, which we are already demonstrating right now in our first chip situation. I really believe, together with what we've been discussing before, our hybrid model with flexibility, with tremendous service to our customers, I think all these add up to a tremendous value-add to our customers for their build-out of their very massive compute power development.

Thank you.

Thank you very much.

Yes, hi. Thank you very much for taking my questions.

My question is also about the ASIC. Thank you, Rick, for the update on the promising outlook.

As we already working on the next-generation project, can you share with us is there any change in terms of business model, like we now mainly doing SerDes and also the turnkey service for our client? Since, Rick, you just mentioned that the design is getting more complex, will the business model change involve more IPs that MediaTek will be able to provide, and also as we are targeting a 10%, 15% of the market share, can we kind of assume that this business will be able to achieve a 20% or higher of our total revenues in next year?

The business model, I think we remain, as I said, our hybrid business model. The value-add, of course, will vary from generation to generation.

I'd like to also say, given the high degree of complexity, which is added to the next-generation chip, we are providing, I think, actually more value, if you look at the total, while our customers is also adding more value in their aspect. That's why we have been always said this is a win-win model.

We get more value, they get more value, and together, they will certainly gain more market share in their end of the business. I'm very pleased with that development.

As to the 2027, David? What was the question?

20% or higher revenue contribution? A 20% or higher revenue contribution?

I,

of course, I think you're asking for really an advanced or indication, I guess, for 2027 revenue. I think it's possible, certainly.

I think 20% is something we believe we have reasonable chance to get to, and we'll do our very best to achieve that.

Sure. Thank you.

Maybe a just quick follow-up. I recall that we are also working with NVIDIA on NVLink-Fusion.

Are we also seeing that any progress on the potential engagement with our ASIC business?

The NVLink-Fusion model is being developed. This is, again, this model by itself is a complex model.

From technical point of view and from business development point of view, I would say we continue to have a very strong and a close relationship with NVIDIA. We both are building the build model, and targeted potential customers.

I cannot really disclose too much more, but it's ongoing. Thank you.

Yeah. Sure, no problem.

My next question is about the gross margin outlook. I recall last time, David, you mentioned that the gross margin for flagship smartphone SOC seems to be lower than corporate average.

I'm just wondering that actually we see that the component price hike has more impact on the entry-level or low-end segmentation, and the portion of our flagship on the good side is that the probably the revenue will be able to kind of support it to compensate the weakness in the low-end space. How would the impact on the gross margin side, and how should we think about the gross margin trends in this year?

I think for full year 2026, our goal is actually to aim to sustain our gross margin at around 46% level, which was similar to the guidance we give out starting from last quarter. When you look at our gross margin fourth quarter last year and also the guidance this year, I think you can consider that would be our goal to maintain at full year.

How do we achieve that? I think like what we've explained during the opening remark, given the overall supply chain tightness right now, I think we've been going through a very rigid about the capacity allocation among the business growth rate and also the profitability.

That's point number one. Point number two, given the overall the cost increasing pressure, we are also in discussion with our customer.

For certain product, I guess we have to pass on some of the cost increase. Combine of that, I think will be reasonable, but the goal will be maintain the gross margin around 46% for the full year.

Thank you. Very helpful.

Morgan. Hi.

Thanks for taking my question. First off, on the data center ASIC project, could you talk a little bit about your understanding of what you are facing from a competitive landscape perspective, because this has been largely the domain of one vendor until very recently for this project?

Also, Rick, could you kind of help us understand a little bit on the technology preparation that you've done on high-speed SerDes, including 400 gig-plus, 3.5D, and CPO? Could you give us a little bit more details on how we can look at MediaTek's capabilities, because that seems to be quite critical for the next-generation, the follow-on project that you mentioned?

Gokul, I guess if you're asking whether how we view other suppliers, our policy is not to comment on competitors' situation. On the other hand, for our own investment, the multiple technologies and IP areas I discussed during the remarks, I think through internal resource consolidation, we have many very capable engineers, while we hire high-caliber technologists, including architects, including power experts, including optics experts.

Those are very difficult technologies. We certainly know that because we're doing them.

Oh, by the way, we're also collaborating with some major third-party players. While they remain very challenging for us, but if you look at the past two-plus years, I think our track record has shown that we have been able to not only catch up, but also to provide a level playing field capabilities for our next generation, and we will continue to compete for future and the broader range of business opportunities.

Thank you.

Just to follow up, this current project that is going into production pretty soon this year, do you think that the deployment model is going to be different compared to previously, that you were working on some different workloads compared to what your competitor is working on? I'm just asking because so far, if you look at data center AI, most of the demand has been largely at the very high end of the spectrum, whether it is for NVIDIA GPUs or AI ASICs.

Just wanted to understand, is there a very big division of workload that is happening at the customer, which gives you this opportunity to kind of break in and kind of for the customer also to segment the demand more clearly?

Basically, Gokul, this question, of course, needs to be answered by our customer. I'm sure you understand the pace of an ASIC chips of such complexity, you have to go back certain amount of years to start when you started the design.

Then you look at the progress or the status of the AI or generative AI at that time and then through that design process until the production, that's, again, we're measuring in I cannot say exactly how many years, but you know well. Since change, but we believe the design of our customer's ASIC chips, they have taken into consideration of their own internal workload needs plus their external requirement workloads.

I cannot say how they balance those workloads. As far as I understand, they are very high on this chip.

Thank you.

Got it. Thank you.

Thank you very much. Just one last question on flagship smartphone.

Given we are expecting a tough market for smartphones, are we still expecting the flagship segment to grow this year, or we think we might have to give up some opportunities to protect profitability?

Gokul, I think from the market share perspective, flagship market share perspective, given our new product coming out every year and also all new products are very competitive, I think we still feel comfortable the market share will continue to gain. Likewise, actually, because right now is the more silicon content in there, we are also seeing generation after generation the blended ASP generation after generation is higher.

The last variable, if you like, really the overall shipment, I have to say, given the overall the memory situation right now is still evolving or developing, based on what we see, probably that will become somewhat year-over-year having some pressure on the flagship overall the market shipment, not the market share. At least we can somehow balance that with our continued gain on market share and also continue, accretion on our ASP.

Got it. Thank you very much.

Thanks.

Yes. Thanks, Rick, David, and Jessie, for taking my questions, and congrats on the solid results and guidance.

I wanted to follow up on the smartphone business. Would you provide more detail about the smartphone linearity for this year affecting your guidance for a significant decline in first quarter?

From the full year perspective, it is going to see negative impacts from the other component supply shortage. Just wondering if you have any quantitative outlook for the overall market versus your own shipments.

Then your overall situation across the mid, high, low-end smartphones, as you are reallocating or optimizing your product mix, could you also just share your view on the market share gain or loss as the previous questions? Thank you.

Haas, sounds your question involves a detail resolution, probably I won't be able to comment. Let me try to start with our full year view for smartphone.

Very straightforward, I think given the overall memory situation, and we believe actually overall smartphone this year year-over-year, maybe we'll see a decline. I think that's on the top line.

In terms of detail resolution for flagship, mainstream, entry-level, even including 4G, we probably won't be able to provide the detail. The key point is when you look at our overall business portfolio, our non-smartphone business, like we explained during the opening remark, will offset big part of that and will grow nicely.

Plus our data center new revenue coming in, which right now we guide is more than $1 billion, I think overall, we're still looking for the top line year-over-year grow. I think probably that's our feedback.

For the detailed segmentation resolution, we, in general, we don't comment that.

Okay. Yes, that's clear.

Then I think just on ASIC TAM beyond hyperscalers accelerators, should we expect your ASIC business to grow beyond this part of the market, for example, like server CPUs and also networking chipsets? Beyond cloud AI computing, could you also discuss more in detail about your potential in automotive ADAS partnership with DENSO, because that is going to be a huge chunk of opportunity with higher level of ADAS being adopted across the vehicles?

Then, I think as part of my second question is that you also mentioned about you are going to put more effort in 5G satellite. Could you discuss more in detail on what kind of chipsets you are working on with your customers, or is it going to be a broader effort in low Earth orbit?

Thank you.

Okay. About data center AI, of course, our first priority and focus remain as what we're going to ship this year, next year, and also the next project following.

In the meantime, we are diligently working on the markets. The AI market is just changing very, very fast every month, every quarter, for sure.

We are rapidly adapting that dynamics. That's why we are investing in technology that is not just for one customer.

We are developing technology which are more generic also, for other applications. Inferencing is getting a lot more important as the GenAI development has gone.

The answer is, we are, but I don't think we can share a lot more than that. On other new business, satellite.

You asked automotive and satellite, yeah? Automotive, certainly, we are very excited to work with DENSO.

We all know this is one of top automotive Tier 1 player, very, very deep technology capability and very, very strong business relations with multiple major car OEMs. The combination between the two companies just perfect.

They provide the deep vehicle integration, understanding all the safety requirements. We provide the low-power SOC, very high performance, plus a very high AI capability that the ADAS will need for the next at least four, five years.

We're excited, and I believe they are too. We look forward to major revenues for both.

Satellite, now we both work on the NTN. From modem point of view, we also actually have a Wi-Fi solution for some of their station on Earth for the satellite business.

This is one area that we feel very good. We cannot say and we believe it's fast growing, but we cannot say how fast so far.

From whatever we are seeing, our connectivity solutions from both modem and Wi-Fi's point of view, we have very strong position already, and we expect to grow on that basis.

Thank you. Yeah.

Thank you so much. That's very clear.

Just one small follow-up, and I will be back in the queue, is that for that NTN projects or the satellite chipsets you have, is it going to be more on the edge side or more going to be on the infrastructure or base station side? Then I think a couple of years ago, you provided a few the target for the next few years on the sales and those margins.

I'm not sure if you are able to provide such guidance at this stage for 2026 and also 2027. Thank you.

I think for the NTN is more on the edge side, not on the satellite side, I think just to be clear. In terms of guidance, we probably won't be able to provide guidance so far because there will still be a few years to come.

It's growing, but still be a few years to come.

Got it. Thanks so much, Rick and David.

Thanks for taking my question, and also congratulations for a very strong outlook, especially on the ASIC side. I do have a two-part of questions.

One is also similar, ASIC, and second question would be on smartphone. For the ASIC, I wanted to ask management whether you see strength over the past months, meaning there's a upside to your forecast, especially next year.

If that's the case, you just mentioned you already assured the key components, but are you sure that your key class HBM can really support that so-called upside order? Lastly, gross margin trend.

I'm wondering for those kind of upside revenue, do you think incremental gross margin would decline? Lastly, given the revenue size is so big, do you think the customer want to change to the COT model in the current generation or next generation?

That's my questions about the ASIC business.

We are, as we said in our remarks, we're very confident for our first-quarter revenue of more than $1 billion. We said for 2027 is multiple billion dollars.

That's the range certainly. I would say we believe if, and I believe we will, when we deliver, when we execute, we expect to see some upside.

From supply point of view, and I also said earlier that we have secured supplies for data center ASIC, NPIs, and other areas. We have a good scale to work with the major suppliers, and we also have certain flexibility among our own different product portfolio.

We also have high confidence that we can provide these supplies for the demand coming next year. We have been preparing for that for some time.

Lastly, again, that question is not really up to us. Again, as I said earlier, I really believe I think all depends on overall objectives.

The overall objectives, I believe, our customers', or actually, for that matter, all the CSPs, is really to provide timely and high-quality, low-power computing capability at a very good TCO to grow their business. As the market is changing so fast and technology pace is so fast, if you look at the history of the our industry, usually it would take partners to work together to achieve that required growth target for everyone.

Unless you're in a very mature industry, you probably can go just by yourself. We're not in that phase at all.

There is a huge amount of growth ahead of us. I fully believe the value-add we provide, and we are also, as I said earlier, we are also working hard with our customers to enhance their value-add.

It's not a zero-sum game, period. We believe this will continue.

Thank you.

That makes lots of sense. Thanks, Rick.

Just a small follow-up on ASIC side before I move to smartphone. You mentioned you feel like your 10%, 15% market share is pretty safe to achieve, right?

My understanding is that your custom ASIC is probably accounts for half or even more of the kind of a total ASIC TAM, right? Is that right way to think about your allocation from this key customer would be like 20% to 30% or even higher?

Based on there's a data point that I just described.

Charlie, I think again, the earlier question talking about target market share or the market share goal is 2028. It's still a few years away, there are so many moving targets.

I think our focus right now is really execution well about the two projects on hand, and market share will become, hopefully, a happy consequence. That's why actually, we will not be able to give out the detailed guidance for the market share for 2028.

Got you. Thanks, David.

My second question on smartphone will be relatively brief. I wanted to get management's thoughts about the agentic AI in China smartphone markets.

What do you think about this Doubao手机 feedback and our MediaTek customers want to do similar kind of application? When do you think that it will become a killer app?

Thank you.

I think we've been dealing with this questions for at least 2 years, if not longer. I will not give you a kind of a boilerplate answer.

It's not obvious this quote, unquote, "killer app." I'm not sure that's the right thinking.

I think the agentic AI will just blend into your life with the smartphone. That smartphone can be a very smart smartphone and you may be just a mid-end because depending on what you need, you can access very sophisticated GenAI models on your phone, but for even more bigger applications, you need to go to the cloud.

We provide solution that will have more than sufficient compute power, but that compute power will be limited by the form factor of the phone itself. That's physics.

The phone will provide ample AI or GenAI or agentic AI capability by itself, but I believe the demand of the application will increase so much and that phone certainly will play the other role of being just connecting to the cloud very effectively and efficiently. That will feel both ends.

I think it's part of life. There may be other form of devices that will enhance people's life using agentic AI.

If there's opportunity or outlook, we are pursuing also. Thank you.

Got you. Thanks.

Thanks, Rick. Thanks, David.

Hi. Thanks, Rick and David and Jessie, for taking my question.

My first question still on the cloud AI. Just want to follow up the Charlie's question.

When you comment the scale and also flexibility, can you help investor understand are you trying to allocate the scarcity resources to incubate your new cloud business? What's the resources you refer to?

Is the wafer allocation, or is the substrate, or your experienced engineer? Thank you.

That's my first question.

Arthur, David here. I think, long story short, we will allocate among all what you say.

Internal R&D resource, like during the opening remark, I think Rick talking about we've been investing sizably R&D, and plus we've been hiring aggressively external resource. Internal resource, I think we will definitely allocate to this fast-growing area, especially with a huge addressable market.

For the overall manufacturing capacity, I think we will put a priority on that as well. All of that, yeah.

Oh, thank you. The second question is more on the cycle and also history.

This is actually not the first time we envisioned that substance of a smartphone. Compared to the last two cycle, can management or Rick comment on what the MediaTek's the strategy right now compared to the previous second downcycle?

Thank you.

Certainly, 2026 is a tough year for smartphone. We I'm sure you you guys have read about that.

No need to further elaborate. I also believe this is a cyclical year.

The the demand the the demand will remain solid next year or maybe 1.5 years. I I cannot say for sure, but I I am quite sure the this the demand will come back.

When it comes back, when it comes back, it will come back in force. We we we need to be prepared for that, and we will be.

MediaTek, during the past few years, we have, I think, developed equipped ourselves to I I think to live through the cycle is on to week actually to to actually, I I believe we will be stronger after the cycle. The capability we're building, the market position, we I feel very confident.

This the mobile business well, as the well, it's now in the sixth year of the 5G generation. Certainly, the growth, overall growth, is saturating.

We all know that. The MediaTek's position, the capability, is much, much stronger compared to our last generation of modem technology.

We feel I don't like the this downcycle, but that's life. We will be better after that.

Thank you. Thank you.

Ladies and gentlemen, this concludes MediaTek 2025 fourth quarter conference call, and an audio replay will be available in one hour after the call at the investors section of MediaTek's website. We would like to thank you for your participation, and you may now disconnect.