Morgan Stanley has retained MediaTek as its preferred stock pick, citing the chipmaker’s advances in cloud AI application-specific integrated circuit - ASIC - design services and its positioning for edge AI workloads. The brokerage published its observations after attending the Taiwan AI Summit 2026, where MediaTek executives laid out the company’s cloud-to-edge AI semiconductor strategy.
On May 25, 2026 MediaTek co-COO and CFO David Ku said the company intends to resist ASIC commoditization driven by customer-owned tooling trends by focusing on adding customer value and differentiating through technology. Management also indicated that cloud AI ASIC operating margin can remain above the corporate average, signaling confidence in profitability for those designs.
Executives clarified MediaTek’s system integration role for the Google TPU program, noting that the company’s contribution relies on chiplet and interconnect technology rather than rack-level systems or networking design. The firm reported it has secured a 2nm ASIC project that is expected to be TPU v9, and that it is bidding for the next-generation assignment.
Morgan Stanley projects multi-year growth through 2030 tied to expected revenue contributions from what the bank believes will be TPU v10 IceFish in 2029 and 2030. MediaTek management said the company has received several requests for quotation from cloud service providers and hopes to add one more customer in addition to Google by the end of 2026.
Regarding agentic AI compute, MediaTek plans to engage in PC and server CPU opportunities either through merchant channels or by providing ASIC design services. The company emphasized that major ASIC designs are not strictly limited to either training or inference use cases, and Morgan Stanley interprets this as a potential volume upside for MediaTek’s TPU v8 and v9 programs relative to Street consensus.
Management emphasized that anticipated AI-driven revenue is incremental to the firm’s smartphone business, which it expects to continue growing alongside edge compute capabilities. The company did not dismiss the possibility that AI service providers could approach MediaTek about future AI-capable phones, noting MediaTek’s turnkey capability. Executives also identified potential growth opportunities in the automotive sector.
Sectors and market notes
- Semiconductor design and foundry-related revenue from cloud AI ASICs could lift MediaTek’s contribution to cloud infrastructure spending.
- Smartphone and automotive markets could see complementary growth from edge AI integration tied to MediaTek’s platforms.
The company’s strategic focus as described at the summit - preserving ASIC margins, pursuing advanced-node ASIC programs, broadening cloud customer engagement, and targeting PC, server, smartphone and automotive segments - underpinned Morgan Stanley’s continued preference for the stock.