MediaTek saw its gross margin rise to 36.4% in the third quarter from 35% in the second, while net profits soared 129% sequentially to NT$5.06 billion (US$167.8 million).

MediaTek's gross margin for the third quarter also represented improvement compared with 35.2% during the same period in 2016. A favorable product mix led to the gross margin growth, according to the company.

MediaTek generated revenues of NT$63.65 billion in the third quarter, up 9.6% on quarter but down 18.8% from a year ago. The company credited its sequential revenue growth to a seasonal pick-up in demand for certain consumer electronics products, but attributed the on-year decrease mainly to lower chip shipments for smartphones.

MediaTek posted operating profits of NT$4.96 billion for the third quarter of 2017, up 110.3% sequentially but down 34.9% on year. Operating margin for the quarter was 7.8%, up from 4.1% in the prior quarter but down from 9.7% in the year-ago quarter.

MediaTek's net profits for the third quarter of 2017 represented a 35.4% on-year decline. EPS for the quarter came to NT$3.26, compared with NT$1.51 in the prior quarter and NT$4.98 a year earlier.

MediaTek also disclosed that inventory turnover came to 85 days at the end of the second quarter, down from 93 days a quarter earlier but up from 63 days during the same period in 2016.

MediaTek expects to post revenues of between NT$59.2 billion and NT$64.3 billion in the fourth quarter of 2017, with gross margin ranging from 34.5% to 37.5%.

Sales of MediaTek's smartphone and tablet chips accounted for 35-40% of the company's total revenues in the third quarter, according to company co-CEO Rick Tsai. Shipments of MediaTek's Helio P23 series that comes with new LTE Cat 7 modem already kicked off in small volume in the third quarter, said Tsai, adding that the shipments will expand in the fourth quarter.

Meanwhile, MediaTek has started shipping its entry-level MT6739 chips in the fourth quarter, Tsai indicated. Shipments of MediaTek's mobile chips will reach a combined 110-120 million units in the fourth quarter.

MediaTek is also gearing up for launch of new Helio P-series mobile chips that will support AI, facial recognition, AR and VR capabilities in the first quarter of 2018, Tsai noted. The new products will help the company continue to improve its gross margin and regain market share, Tsai said.

In addition, sales of MediaTek's non-mobile SoC chips including solutions for IoT applications, power management ICs and ASIC chips will see impressive growth in the fourth quarter, Tsai indicated. The segment is expected to register over 30% revenue growth in all of 2017, Tsai added.