MediaTek Approves $5 Billion Financing for AI Data-Center Chips as Custom ASIC Market Seen Hitting $80 Billion

MediaTek's board approved a $5 billion discretionary financing budget to support expansion into AI data-center chips, including custom ASICs for cloud providers, Reuters reported on July 31. The Taiwanese chip designer raised its 2027 addressable-market estimate for custom AI silicon to $80 billion and increased its target market share to 15–20%, a signal of how aggressively it plans to challenge Broadcom and Marvell in the red-hot custom-accelerator market.

First Silicon in Q4

MediaTek's first custom AI chip is set to begin production in the fourth quarter of 2026, with a second chip slated for volume production in 2028. The company expects more than $2 billion in data-center AI chip revenue in 2026 alone. The plan marks a strategic pivot from MediaTek's smartphone roots: its mobile-chip revenue fell 20% year-over-year in Q2 amid weak handset demand, while hyperscaler demand for custom accelerators shows no sign of slowing.

"This is a once-in-a-generation expansion of the addressable market, and we intend to capture a meaningful share of it," MediaTek said in its board statement.

Market Reaction

Shares closed up 9.9% on July 31 following the announcement. The move comes as Samsung Electronics warned that the memory shortage — DRAM, NAND, and HBM — could persist until 2028 on strong hyperscaler demand, and as custom AI silicon becomes the fastest-growing segment of the semiconductor industry, with Jefferies projecting big-tech AI spending approaching $800 billion over the next 12 months.