Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Novatek Microelectronics Corp / Equity Bottom-Up

<ul>
<li>4Q25 Guidance: Revenue NT$22–23bn (declined 4.9% QQ); Entering traditional low season. Gross Margin: 35–38%; Operating Margin: 14.5–17.5%.</li>
<li>AI-Integrated products currently ~20% of SoC revenue and growing. Image SoC / New Camera Trends: New AI Vlog cameras seeing positive demand. </li>
<li>Key 2026 factors: FX, gold price, raw materials (KGD, substrate) supply.</li>
</ul>


4Q25 Guidance: Revenue NT$22–23bn (declined 4.9% QQ); Entering traditional low season. Gross Margin: 35–38%; Operating Margin: 14.5–17.5%.
AI-Integrated products currently ~20% of SoC revenue and growing. Image SoC / New Camera Trends: New AI Vlog cameras seeing positive demand. 
Key 2026 factors: FX, gold price, raw materials (KGD, substrate) supply.


Novatek (3034.TT): 4Q25 Decline; AI-Integrated Products Currently ~20% of SoC Revenue and Growing.

<ul>
<li>3Q25 Outlook &amp; Guidance- Revenue: NT$23.7–24.7bn( down 9.5~5.7% QoQ); Gross Margin: 34–37%; Operating Margin: 15–18%; USD/TWD Assumption: 29.5</li>
<li>Weaker demand from China due to subsidy tapering in 3Q25, but seasonal stocking in non-China markets.</li>
<li>2025 foldable penetration estimated at ~1.6% (~19mn units); Large foldables: higher internal display resolution and ASP; OLED TDDI advantage: fewer components, more space-efficient, enabling thinner phones. </li>
</ul>


3Q25 Outlook &amp; Guidance- Revenue: NT$23.7–24.7bn( down 9.5~5.7% QoQ); Gross Margin: 34–37%; Operating Margin: 15–18%; USD/TWD Assumption: 29.5
Weaker demand from China due to subsidy tapering in 3Q25, but seasonal stocking in non-China markets.
2025 foldable penetration estimated at ~1.6% (~19mn units); Large foldables: higher internal display resolution and ASP; OLED TDDI advantage: fewer components, more space-efficient, enabling thinner phones. 


Novatek (3034.TT): 3Q25 Outlook Is Expected; Weaker Demand from China Due to Subsidy Tapering.

<ul>
<li>We expect <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a>'s 3Q25 might be decline 5-10% QoQ, reflecting 2H25 US tariffs impacts and Chinese opponent's competition.   </li>
<li>The Foldable handset may be indicated a new era to come, and we believe <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a> shall be one of the DDIC winners.  </li>
<li>The stock price of <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a> is long staying with NT$450~650 since the beginning of 2024, and the current price is at the relative low point.</li>
</ul>


We expect Novatek Microelectronics Corp (3034 TT)'s 3Q25 might be decline 5-10% QoQ, reflecting 2H25 US tariffs impacts and Chinese opponent's competition.   
The Foldable handset may be indicated a new era to come, and we believe Novatek Microelectronics Corp (3034 TT) shall be one of the DDIC winners.  
The stock price of Novatek Microelectronics Corp (3034 TT) is long staying with NT$450~650 since the beginning of 2024, and the current price is at the relative low point.


Novatek (3034.TT): FX Impact Persists; 3Q25 May Be a Down Quarter.

<ul>
<li>The supply chain received good news that <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a> as successfully passed iPhone 16 OLED DRIVER IC (DDIC) qualification.</li>
<li>Novatek's recent alliance with ARM to develop Neoverse V2 is a noteworthy development.</li>
<li>Novatek's 1Q24F forecast remains unchanged, but the outlook for 2024F is likely to show positive growth.</li>
</ul>


The supply chain received good news that Novatek Microelectronics Corp (3034 TT) as successfully passed iPhone 16 OLED DRIVER IC (DDIC) qualification.
Novatek's recent alliance with ARM to develop Neoverse V2 is a noteworthy development.
Novatek's 1Q24F forecast remains unchanged, but the outlook for 2024F is likely to show positive growth.


Novatek (3034.TT): It Had Been Qualified by the IPhone 16 for OLED Driver IC.

<ul>
<li>Novatek's share price has surged by more than 15% in four days due to the news of Novatek's alliance with ARM to develop Neoverse V2.</li>
<li>While the decision on whether the iPhone 16 will feature OLED technology is still pending, the general sentiment is optimistic.</li>
<li>Novatek is set to leverage Intel Corp (INTC US)'s 12nm capacity through United Microelectron Sp Adr (UMC US) in the near future.</li>
</ul>


Novatek's share price has surged by more than 15% in four days due to the news of Novatek's alliance with ARM to develop Neoverse V2.
While the decision on whether the iPhone 16 will feature OLED technology is still pending, the general sentiment is optimistic.
Novatek is set to leverage Intel Corp (INTC US)'s 12nm capacity through United Microelectron Sp Adr (UMC US) in the near future.


Novatek (3034.TT): It's Said to Alliance with ARM to Build up Neoverse V2, Targeting AI Market.

Taiwan

Novatek Microelectronics Corporation designs, manufactures, and markets integrated circuits (ICs).  The Company's products are used in telecommunication, computer peripherals, and LCD (liquid crystal display) drivers.

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Novatek Microelectronics Corp (3034 TT)

Novatek (3034.TT): 4Q25 Decline; AI-Integrated Products Currently ~20% of SoC Revenue and Growing.

Q4 guidance of NT$22-23bn with declining margins. AI-integrated products growing, new AI Vlog cameras in demand. Key factors for 2026: FX, gold...

Patrick Liao

Novatek (3034.TT): 3Q25 Outlook Is Expected; Weaker Demand from China Due to Subsidy Tapering.

3Q25 outlook: Revenue down 9.5-5.7% QoQ, weaker China demand but seasonal stocking in non-China markets. 2025 foldable penetration estimated at...

Patrick Liao

Novatek (3034.TT): FX Impact Persists; 3Q25 May Be a Down Quarter.

Novatek 3Q25 expected to decline 5-10% due to US tariffs and Chinese competition, but potential DDIC winner in foldable handset era. Stock price...

Patrick Liao

Novatek (3034.TT): It Had Been Qualified by the IPhone 16 for OLED Driver IC.

Novatek's successful qualification for iPhone 16 OLED DDIC and partnership with ARM for Neoverse V2 development signal positive growth in 2024.

Patrick Liao

Novatek (3034.TT): It's Said to Alliance with ARM to Build up Neoverse V2, Targeting AI Market.

Novatek's stock soars on partnership with ARM for Neoverse V2, potential collaboration with Intel for 12nm capacity. Optimism surrounds iPhone...

Patrick Liao

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Novatek (3034.TT): 4Q25 Decline; AI-Integrated Products Currently ~20% of SoC Revenue and Growing.

​Q4 guidance of NT$22-23bn with declining margins. AI-integrated products growing, new AI Vlog cameras in demand. Key factors for 2026: FX, gold...

Patrick Liao

Novatek (3034.TT): 3Q25 Outlook Is Expected; Weaker Demand from China Due to Subsidy Tapering.

​3Q25 outlook: Revenue down 9.5-5.7% QoQ, weaker China demand but seasonal stocking in non-China markets. 2025 foldable penetration estimated at...

Patrick Liao

Novatek (3034.TT): FX Impact Persists; 3Q25 May Be a Down Quarter.

​Novatek 3Q25 expected to decline 5-10% due to US tariffs and Chinese competition, but potential DDIC winner in foldable handset era. Stock price...

Patrick Liao

Novatek (3034.TT): It Had Been Qualified by the IPhone 16 for OLED Driver IC.

​Novatek's successful qualification for iPhone 16 OLED DDIC and partnership with ARM for Neoverse V2 development signal positive growth in 2024.

Patrick Liao

Novatek (3034.TT): It's Said to Alliance with ARM to Build up Neoverse V2, Targeting AI Market.

​Novatek's stock soars on partnership with ARM for Neoverse V2, potential collaboration with Intel for 12nm capacity. Optimism surrounds iPhone...

Patrick Liao

Q4 guidance of NT$22-23bn with declining margins. AI-integrated products growing, new AI Vlog cameras in demand. Key factors for 2026: FX, gold...

3Q25 outlook: Revenue down 9.5-5.7% QoQ, weaker China demand but seasonal stocking in non-China markets. 2025 foldable penetration estimated at...

Novatek 3Q25 expected to decline 5-10% due to US tariffs and Chinese competition, but potential DDIC winner in foldable handset era. Stock price...

Novatek's successful qualification for iPhone 16 OLED DDIC and partnership with ARM for Neoverse V2 development signal positive growth in 2024.

Novatek's stock soars on partnership with ARM for Neoverse V2, potential collaboration with Intel for 12nm capacity. Optimism surrounds iPhone...