Welcome to the MediaTek 2020 fourth quarter investors conference call. Financial results and presentations for today's call are available on the investor section of the company website at www.mediatek.com. Now, I would like to turn the call over to Ms. Jessie Wang, the Deputy Director of Investor Relations. Ms. Wang, please go ahead. 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 and the 2020 full-year 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 the actual results materially different from this statement. The presentation material 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 financial updates. Thank you, Jessie. Let's start with 2020 fourth quarter financial results. The currency here is all in NT dollar. Revenue for the quarter was TWD 96.4 billion, down 0.9% sequentially and up 49% year-over-year. In U.S. dollar terms, revenue for the quarter was $3.3 billion, up 1.5% sequentially and up 57.9% year-over-year. Annual revenue total TWD 322 billion, up 30.8% year-over-year. In U.S. dollar term, revenue for the year was $10.9 billion, up 37.2% year-over-year. Gross margin for the quarter was 44.5%, up 0.3 percentage points sequentially and up 2 percentage points year-over-year. Gross margin for the year was 43.9%, up 2 percentage point from the previous year. Operating expense for the quarter were TWD 27.5 billion compared with TWD 28.4 billion in the previous quarter and TWD 21.3 billion in the same period last year. Full year 2020 operating expense was TWD 98.3 billion, compared with TWD 80.5 billion in 2019. Operating income for the quarter was TWD 15.4 billion, up 5.1% sequentially and up 146.9% year-over-year, n on-TIFRS operating income for the quarter was TWD 16.1 billion. 2020 full-year operating income was TWD 43.2 billion, up 91.5% year-over-year, n on-TIFRS operating income for the year was TWD 46.1 billion. Operating margin for the quarter was 15.9%, increased 0.9 percentage points from the previous quarter and increased 6.3 percentage point from the year ago quarter, n on-TIFRS operating margin for the quarter was 16.7%. Operating margin for the year was 13.4%, up 4.2 percentage point from 2019, non-TIFRS operating margin for the full year was 14.3%. Net income for the quarter was TWD 15 billion, up 11.9% sequentially and up 134.3% year-over-year, non-TIFRS net income for the quarter was TWD 15.6 billion. Net income for the year was TWD 41.4 billion, up 78.6% year-over-year, non-TIFRS net income for the year was TWD 43.8 billion. Net profit margin for the quarter was 15.5%, increased 1.8 percentage point from the previous quarter and increased 5.6 percentage point from the year ago quarter, non-TIFRS net profit margin for the quarter was 16.1%. Net profit margin for the year was 12.9%, up 3.5 percentage point year-over-year, non-TIFRS net profit margin for the year was 13.6%. EPS for the quarter was TWD 9.35, up from TWD 8.42 in the previous quarter and up from TWD 4.03 in the same quarter last year, non-TIFRS EPS for the quarter was TWD 9.73. For 2020 full years, EPS was TWD 26.01, compared with TWD 14.69 in 2019. Non-TIFRS EPS for the full years of 2020 was TWD 27.52. The detailed reconciliation table for our TIFRS and the non-TIFRS financials is attached in our press release for your information. That concludes my comments. Thank you. Thank you, David. Now I would like to turn the call to CEO, Dr. Rick Tsai, for prepared remarks. Thank you. Good afternoon, everyone. I hope first you and your families are all safe and healthy. Today, I will start with MediaTek's 2020 achievements and 2021 outlook. We'll walk through highlights in each segment, as well as provide our first quarter 2021 guidance. 2020 marked a milestone year for MediaTek, and we believe it is just the beginning of our growth trajectory. We concluded 2020 with good fourth quarter results, both revenue and gross margin coming in at the upper end of our guidance. This brought our full year revenues to record level of $10.9 billion. All the three product groups grew at year-over-year double digit percentage rates in revenues in 2020. In addition, we delivered very strong year-over-year growth in 2020 across all of our key financials metrics, in spite of macroeconomic uncertainties and unfavorable foreign exchange rate. 2020 gross margin increase for the third consecutive year, and operating income nearly doubled from 2019. Quarterly operating income has been growing year-over-year for 12 quarters in a row. In 2020, we demonstrated technology leadership by gaining meaningful share in 5G and Wi-Fi 6 globally in the first year of the end market takeoff. Moreover, our diverse analog, multimedia, and computing IP portfolio enabled products such as smartphones, Wi-Fi routers, notebook PCs, Chromebooks, online streaming devices, gaming consoles, digital TVs, et cetera, to meet the surging global demand. Adding all these up, MediaTek powered your everyday life with 2 billion devices in 2020. A substantial number that further strengthens our cross-platform competitive advantages. These solid performances in the past few years are the result of our investments in key technologies and IPs, which lead to a structure change in our business and product portfolio. The structure change has established a strong foundation for MediaTek growth trajectory and makes us more resilient to potential short-term fluctuations. For 2021, we believe it is another year of strong revenue growth, in spite of a strong NT dollar appreciation. We will be able to outperform the market with expansion in multiple areas. While we aggressively expand addressable market and market shares in all major product segments, MediaTek still maintains our gross margin in the current range of 43%- 44%. Moreover, we expect our operating profit dollar and operating margin to increase strongly again in 2021. Most importantly, we will continue to invest aggressively in R&D this year with a $3 billion budget in order to build more technology assets and solidify the foundation for our next phase of growth. We are confident that the synergizing of our strong IP portfolio and diverse product platforms will give us unique competitive advantages in expanding multiple serviceable markets. Let me give you a couple of examples. M70 modem, while giving us a good head start in the 5G smartphone rev cycle, covering complete market segments as well as global footprint, will also enable MediaTek access to global operators through a synergized portfolio, including Wi-Fi 6 hub and set-top box. Our industry competitive Arm-based CPUs and multimedia IPs have not only empowered the high-end mobile application processors, but also created major opportunities in the computing, conferencing, and surveillance applications. These multiple growth engines and others, we believe, will drive our strong mid to long-term profitable and sustainable growth. Now, I'd like to go through fourth quarter business highlights for each segment and then talk about the first quarter guidance. First of all, growth areas, which mainly consist of IoT, PMIC, and ASICs, accounted for 29%-33% of fourth quarter revenue. This segment performed better than company average in the fourth quarter and grew more than 40% compared to a year ago. Several products, including Wi-Fi and power IC, achieved all-time high quarterly revenues. For IoT, Wi-Fi expansion is driving the business. We are seeing increasing Wi-Fi 6 demand in high-end routers, broadband, and TV. Furthermore, MediaTek Wi-Fi 6 solutions have been adopted by multiple global notebook and Chromebook brands. The first project for high-end Wi-Fi 6 gaming notebooks will hit the market in the first quarter, with more to come. On the technology side, we are selected to be on the test bed for Wi-Fi 6E and have already started Wi-Fi 7 investments for continuous expansion. For power ICs, we announced to acquire Intel Enpirion power business in the fourth quarter. This would provide a strategic product portfolio and enable more high-end enterprise business in the future. We are seeing strong demand in power ICs and discrete power components across various product applications. For ASICs, several new enterprise ASICs projects are scheduled to commence volume production this year. Hot-selling new game consoles would also continue to contribute revenue throughout their product cycles. Meanwhile, we are working on new projects, both for enterprise and consumer products, to expand our revenue in the following years. Next, Smart Home and others. Primarily TV and other traditional consumer electronics accounted for 21%-26% of revenue in the fourth quarter. Revenue momentum was somewhat constrained by capacity in the fourth quarter. TV market by unit is relatively stable, we continue to see customer traction on better picture quality and faster wireless connection to accommodate the online streaming trend. Our pioneering AI integration and connectivity perfectly fit the demand. In 2021, we are confident to maintain our global leading position to power global TVs in all segments with further share gains. Onto mobile computing, which includes smartphone, tablets, and Chromebooks, accounted for 45%-50% of the fourth quarter revenue. Mobile computing revenue again grew very strongly with more than 80% year-over-year increase, driven by higher 5G adoption in mass market. For 5G, MediaTek launched a complete product portfolio and engaged with all global major Android smartphone brands in 2020. Our 5G market share has already exceeded 40% in markets we serve in 2020. We aim to further increase shares this year. 2021 will be the second year for the phenomenal 5G migration. We forecast global 5G smartphone shipments this year to be more than 500 million units, 2.5 x of last year's shipment. MediaTek's complete product portfolio is fully ready to capture the migration opportunity. For high-end, we have design-in activities with multiple customers using Dimensity 1200, and devices are expected to launch in late first quarter. In mid-range and mass market, Dimensity 800 and 700 series will continue to ramp strongly. Furthermore, MediaTek closely works with global operators and customers. Our 5G solutions will have higher presence in regions including U.S., Japan, and European countries this year. On the thin modem side, notebooks with MediaTek 5G thin modem inside are scheduled to launch in the second quarter. We expect to see more models and new applications, such as CPE, with global operators in the second half of the year. Development of millimeter wave thin modem and SoC is on track with customer samples this year for revenue starting 2022. For 4G, we will introduce new products for better user experience this year. 4G remains a sizable market, and we believe we will continue to be the market leader. Another driver is the fast-growing Chromebook market. We forecast Chromebook units to increase approximately 60% year-over-year this year. As a leading player in Arm-based Chromebook CPU, we are confident to acquire new market share in the midterm. Now, turn to first quarter guidance; w e see above seasonal demand in the first quarter, partially offset by the ongoing supply constraint. Mobile computing revenue in the first quarter are expected to increase significantly quarter-over-quarter, and more than double on a year-over-year basis. Driven by 5G smartphone ramp, as well as share gains in both 4G smartphone and Chromebook. Growth area is also expected to grow strongly year-over-year, thanks to healthy demand across board. For the first quarter revenue analysis, there are two factors I would like to inform you. The first is unfavorable foreign exchange rate. The recent FX fluctuation has a 3% impact on our revenue in NT dollar compared to the last quarter. The other factor is the full quarter revenue exclusion from Ilitek, which affects 2%-3% of revenue in US dollar. With that, at a forecasted exchange rate of TWD 27.9 to $1, we expect our first quarter revenue to be in the range of TWD 96.8 billion to TWD 104.1 billion, flat to grow 8% sequentially and up 58% to 71% year-over-year. In US dollar terms, and excluding the above-mentioned divestment, our first quarter revenue were to increase 6%-14% sequentially. First quarter gross margin is forecasted at 43.5% ±1.5 percentage points. Quarterly operating expense ratio to be at 26.5% ±2 percentage points. That concludes my prepared remarks. Thank you. Thank you, Rick. We are now ready for Q&A. May we have the first question please, operator? Yes. Ladies and gentlemen, we are now in question and answer session. If you would like to ask questions, please press zero, one on your telephone keypad. Please ask your questions after your name is announced. To cancel your questions, please press zero, two. As a reminder, it is greatly appreciated that you turn off the speakerphone mode of your device to prevent possible echo effect. We thank you for your cooperation. Please press zero, one if you would like to ask questions. Thank you. The first to ask questions, Gokul Hariharan, JP Morgan. Happy New Year, congratulations on a great result. Thanks for taking my question. My first question is on 5G. Now that we are getting to reasonably high penetration in China for 5G, could we talk a little bit about how the other markets will evolve based on your conversations with customers? Do we start to see rapid 5G adoption happening in some of the other markets? We have been working with some of the operators, et cetera. Could you talk a little bit about how the non-China 5G markets will be evolving, especially as we go through the rest of this year? I think first half probably is still going to be very strong in China. As we get to a higher degree of penetration, could we talk a little bit about 5G in non-China markets? Also on 5G chips, do you see any supply tightness at this point, given a lot of the capacity tightness at the foundry level? I had a follow-up question for David as well. Thank you. Cool. Okay. I'll probably just first answer about the 5G non-China market. To start with that, I think last year, we were kind of talking about even last year. The first year of a 5G product cycle, we actually already launched a few products in the U.S. market already. Also, not just on the smartphone side, but also on the thin modems side, I think for this year, I think Intel with our thin modems will start to launch this year as well. Overall, I guess, not just this year, I think starting from last year, we see the global market, not just the China market, as our addressable market. In terms of market size or revenue contribution, even for this year, I think a majority of the revenue contribution, especially for the first quarter we talked about earlier, is going to still be mainly from the China side. We try to forecast for the non-China 5G contribution this year, at least for the first quarter, probably will still going to be minor. I think, for the global 5G smartphone demand, China probably will still, for 2021, as we said in the remarks, we expect to see 500 million or more units to be shipped. I think, among which at least 60% will be in China and the rest, about 40%, from non-China areas. You have a question on... Supply tightness. ...supply tightness. On 5G? Yes, on 5G. I think there's still a supply tightness. Overall, I think that is not really news to everyone. I think we, MediaTek, is able to basically get, I think, sufficient capacity from our supplier partners. I believe this tightness will continue at least throughout the next couple of quarters. Despite that, as we said in the prepared remarks, we still expect MediaTek to gain market share in 5G smartphone shipments, SoC shipments. We are confident we can achieve that. Thank you. Got it. Thank you very much. Just one follow-up question on the operating expense. I think if I try to back out employee bonus from last year, looks like OpEx grew about 15% to 20% last year. David, could you give us some indication in terms of how you're budgeting for OpEx growth this year, given growth is really strong from a top-line perspective as well? I think for the OpEx full year, this year, as CEO Rick talked about, this year, we increase our overall investment more aggressively to precisely in our R&D. I think for the first quarter, probably the best way to factor in for operating expense, excluding profit sharing, is roughly TWD 20 billion-TWD 21 billion, roughly for the first quarter. For the full year, probably the better way to think about that is from the ratio perspective. I think from the total OpEx ratio, we do kind of forecast even the overall revenue coming down, even the operating expense dollar increase, our view is actually the OpEx ratio should be coming down. I think the first quarter's ratio could be a good reference for the full year. Got it. Thanks, David. Next, we're having Sebastian Hou, CLSA. Go ahead, please. Hey, thank you for taking my questions. First questions, I'd like to ask about the gross margin and overall profit margin outlook. Given the supply constraints across many products of the company and also your peers, and also the industries, I'm curious about how do you see this will affect the pricing and also the margin outlook for the company this year, which may potentially be more positive? Okay, Sebastian, I think when we talk about the gross margin, there are several factors that actually we need to balance it out. Supply situation is one thing we can mention. From our perspective, I think, so like the CEO talked about earlier, this year, I think overall strategy of us is trying to aggressively expand the market share across all three major business lines. More importantly, we're also trying to branching out into different product implementations. Consider everything, and also consider, more importantly, is one other factor, is competition. While we're trying to balancing everything out, I think our overall strategy this year is trying to take advantage of our very strong 5G position and try to expand into 5G, and also expand addressable market and market share for other products as well. In the meantime, maintain our gross margin for this year, roughly in the range of 43% and 44%, basically stabilizing it. I think what we're looking for this year is really just another year of very strong operating margin, both from a dollar perspective and also from a ratio perspective expansion. I think that's our overall strategy this year. Right. Thanks, David. Just one follow on the OP margin expansion that you just commented. In the last year, I think from 2019 to 2020, your OP margin increased by four percentage point. You mentioned that it's another strong year. Can we expect a similar four percentage point or even more magnitude of the increase of OP margin for this year? In terms of magnitude, unfortunately, due to regulation, we probably will not be able to comment. Probably the better way to think about it is from the operating margin dollar perspective rather than from the ratio perspective. Yeah. From the operating margin dollars, I think we feel fairly comfortable we'll increase strongly. The ratio, I think, will increase as well, but every year, the ratio will be different given the fact the size right now is very different. Okay. Thank you. My second question is that, Dr. Tsai has mentioned that there are several ASIC projects that will enter commercial production this year. I think last year, I think you have shared with us about the Cloud AI and game console, this ASIC. I'm curious whether you could elaborate more with us about what kind of the projects, in which applications that we may potentially see mass production this year. How would that be, if it's possible to give a little bit quantitative numbers about how, in terms of the incremental revenue contribution from this new ASICs, would it be as meaningful as those ASIC projects contribution last year or even more? Thank you. The ones you mentioned, the ASIC project in the data centers and the game consoles, of course, are now in production, in 2021. We are aiming continuously at hyperscale data center as a market, also we're aiming at 5G infrastructure segment. Of course, we continue to spend time and resources on the consumer part, which we are a leading player. The incremental revenue, I think, David, do you want to comment? Yeah. For the full year incremental revenue, I think given the fact last year, we are close to TWD 11 billion, this year is actually growing somewhat. I think for the incremental, on the relative scale, it will be small. I think on the Y-on-Y growth, I think we're still looking for very strong double-digit growth. Last question from me is that I think that we do hear some of your customers have had overbooking behaviors, at both you and your competitors. I'm just curious about how I think you probably definitely see that as well, but just curious how the company manage the customers, this kind of the overbooking forecast, and how do you going to fulfill the demand? There is also supply constraints as another factor. Just curious if you could share with us, how do you mitigate the potential inventory risk, but at the same time also fulfill customers' demand. Thank you. I think overall, when we're getting the customer demand, we're also looking at the channels, the inventory situation, both from the customer channel side and also from the resale channel side. Normally what we would do, we would balance this out and based on our own judgment on that. So far, especially based on the channel inventory and also from the customer inventory perspective, even though, given the fact right now with sort of the capacity shortage is a global phenomenon, so you can rest assured the customer will come in with some overbooking situations over there. Once we balance it out with the general inventory situation and also the customer inventory situation, we still feel right now overall it's comfortable. Okay. We don't really see any strong overbooking, especially on the inventory side. Maybe on the demand side, people are trying to ask him for more, but the actual product we can deliver or the whole industry can deliver, and especially when you calculate about the channel inventory and the customer inventory, we believe right now it's still healthy and stable. Okay, t hat's great. Thank you. Now the line is open to Bruce from Goldman Sachs. Hi. Good afternoon, t hank you for taking my question. Very, very good result. I think I'm very happy to hear that management talking about long-term growth driver. I've been asking this question for multiple quarters. Can you give us a little bit more color in terms of what is the size for all these new addressable markets, such as Arm-based CPU? What kind of part addressable market, w hat kind of size? Because MediaTek already achieved TWD 10 billion revenue, and we need sizable addressed market to fuel the growth. In addition, can we have more color in terms of your smartphone revenue growth in multi years? TSMC suggested that their smartphone revenue will grow similar with the corporate average, with 10% to 15% for the next five years. Can we assume that MediaTek smartphone revenue will grow even stronger than that, as we believe MediaTek will continue to benefit from the market share again? Bruce, the SAM we are looking at, it's quite a complex situation because we cover such a complex portfolio. What I can say is, we are seeing, for instance, let's just put an example, the growth area in a rough way. We are seeing a SAM about, say, TWD 15 billion to TWD 16 billion for our growth area, which means we have a long way to go. We are doing well, quite well. That business grew year-over-year more than 20% last year. The market share we have there is still definitely below 25%, that kind of a range. We are confident that, just to give you an example, the growth area, we have a pretty large headroom for the growth. For the smartphone 5G, last year, this year, I think we're talking about really a very strong growth, kind of a number. To understand, we're talking about now is about, say, TWD 13 billion, just by 5G, that's smartphone alone. Of course, we certainly, our market share over there, is higher. Still, I think we're still below 30% or 35% in market share. I cannot tell you exactly the CAGR for the next five years, but I can tell you, the growth rate last year, this year, and next year will be substantially higher than the, put the number, you just match it. Okay. Thank you. Okay. Another question from me, can we talk about that 5G smartphone chip ASP evolution year-on-year? What is the blended base ASP evolution during the 4G era during their year two, a s we're moving into 2021, what is the ASP evolution for 5G this year? We probably won't be able to comment specifically for 5G ASP evolution. I think probably the better way to think about smartphone as a whole, so the blended smartphone ASP, due to the 4G, 5G transition, and we believe actually this year is going to be another year of accretion from the blended ASP perspective. When you look into the global market perspective, I think last year, the overall shipments, compared to 2019, is coming down a bit. This year, we believe the global shipment should be close to 1.3 billion units globally, back to 2019 level. More importantly, I think the dollar content, basically the ASP on a blended basis, essentially is going to be much higher. Probably that's the best way to look at that. Again, if you only look at 5G ASP, because right now we're trying to expand into the different sector with different time frames. For example, earlier this year, probably we have a new product, for example, Dimensity 1200 5G coming out on the high-end. Probably at the middle this year, we're going to march into the mainstream. It's very quarter by quarter. It's not going to be a good indicator. Probably the better way to think about that is from a full year blended ASP perspective. Okay. What is the revenue split in 4G and 5G in Q4? When will 5G revenue surpass 4G? Well, can you say it again? Because I think your voice actually is very weak. What is your revenue split between 4G and 5G in Q4, and when the 5G revenue will surpass 4G? We didn't really disclose those numbers, but, I can give you from a direction perspective. Last year, on a quarterly basis, I think 4G revenue is going to still greater than 5G. Starting from first quarter this year, we see the switching, the pivot point coming out. I think starting from Q1 this year, the 5G revenue will greater than 4G, starting from Q1. I think that trend will continue for the full year. I see. Okay, last question from me is that I heard that management suggest that the long-term gross margin will be stable at the current level. I am a bit surprised to hear that because as management mentioned, you have a lot of enterprise chip is ramping up, which supposed to be higher gross margin, 5G smartphone supposed to be higher gross margin, y ou also have a lot of growth segment which has much better product mix. We are very surprised to see the gross margin will be at the current level. Can you provide a bit more color on that? Well, first of all, I think, the CEO, Dr. Tsai, was talking about for 2020, not for the longer term. I think, because every year, 2021. It's actually different, I think, I agree with you, we have a lot of growth opportunity. For 2021, we have some strategic goal we're trying to reach. That will be our goal, and that will be our strategic topic to maintain that in the 43%-44%. Doesn't mean that's a long-term cap. I think that's not what we talked about earlier. I see, u nderstand. Thank you. Next, we have Roland Shu from Citigroup for questions. Go ahead, please. Thanks. Very good result. First question, I also just follow up for the gross margin. For your Dimensity 1200, it's made by TSMC's 6-nanometer process. I think definitely it's better in performance. How does its cost and overall effectiveness compare to previous Dimensity 1000 by 7- nanometer? Is this going to be a product with a better margin, or with a lower cost and a better margin than Dimensity 1000? Roland, we normally, as a policy, don't really disclose the specific product gross margin. Yeah. How about the product-wise? Definitely, I think millimeter wave this newer technology. What is the effectiveness for you to migrate from 7- nanometer to 6-nanometer? I think definitely the Dimensity 1200 is going to be better pricing compared to Dimensity 1000, because actually, right now, we're adding into even a higher rate of that. I think probably that's another way to answer your question indirectly. Okay, u nderstood. With that, this is better pricing, is this a 43%-44% gross margin this year, a conservative number? This is my point. Yeah. Yeah. Well, I won't say it's conservative. Again, you need to consider a lot of other factors. In addition to the smartphone, we also have other lines of business as well. Like we explained earlier, even for the 5G specifically, we're also going to have the high-end, and also in the meantime, we're talking about volume really doubles. You can assume that the huge volume will not only come out from the mid high-end, will coming out from the entry-level as well. I think that's the contribution of the all product segments, and also, more importantly, different business online. Roland, I guess to everyone also, this year continues to be, as we said, as you asked, a supply-constrained year. You all know that all the suppliers, front end and back end, are increasing their price. We are doing, of course, everything we can to pass some of those cost increase on to our customers. This is not a one-shot type of thing that we can achieve, i t takes time, t he situation is quite dynamic. We're talking about easily a 0.5 point to 1 point type of a difference just because of that. With that in mind, I hope you can also keep that in mind. We have this supply-side cost issue, and I think, actually, if anything, we are getting relatively a good price from our suppliers compared to many other companies. Still, impact on gross margin cannot be just brushed away. Thank you. Thanks for your clarification. Follow-up, you said about the cost increase, because for this supply constraint. Can you pass through the cost to your customers? Also, for this supply tightness, do you think this is favor you or against you in terms of the competition point of view? Thank you. Well, I think let's talk about cost first. I think, like the CEO explained earlier, I think we will definitely try to pass some of that to our customer, but sometimes we have some time delay, and also, we also need to consider about the overall competitive situation, because don't forget, actually, that we have several competitors out there, and all may have been quite aggressive about 45 billion market share. I think that's the key. Okay. How do you see the overall competition across the board? You mean the [audio distortion] competition or just overall competition? Yeah. Price competition or product competition from your competitors. As we can see, starting from last year, even though that's the first year of our 5G rollout, we actually get a very good market share. I think that actually surprised everyone, which including our competitor. You can rest assured they're trying everything. They're trying to come back and trying to get more market share back. I would say that we've been dealing with that situation, actually, not just for last year, for the last few years. We feel comfortable with our product portfolio. More importantly, with our investment technology, we can actually compete effectively. Competition situation is always, I would say, normal state then. Overall, I guess our capability to compete effectively is getting better and better. That's how I view it. Okay, u nderstood. My last question is for your 4G SoC shipment, how do you compare with last year? Is the 4G SoC shipment to increase this year? I think for 4G overall, from the shipment perspective, consider 4G globally is coming down. Our market share probably slides up a little bit. I think overall, 4G, we're looking for, shipment-wise, another year of flat-ish. Flatt-ish? How about the ASP, the price, and margin for the 4G? I think the ASP probably will flatt-ish coming down a little bit, because every year, actually, I think there was some pricing pressure on the 4G side, so it will be flattish, just slightly down. Okay, understood, i t was helpful. Thank you. Right now, we're having Randy Abrams from Credit Suisse. Go ahead, please. Okay, y es, thank you. Good result. I wanted to follow up a question on the share gains you were discussing in mobile. Could you talk, just the two areas, I think, one, the high end, how you're seeing your market share, trend, if you see continued gains. Also the share gain as the market moves down into the mainstream. If you could talk to your recent 1100 and 1200 Dimensity that just launched, how you see it stacking up, if it's up to the level of Qualcomm's Snapdragon 800 tier, and you're starting to get more design wins into that flagship segment. Okay. Randy, Dimensity 1200 is our current, or I should say, best performing SoC. The comparison to our competitors' chips, I think, actually, is quite available, probably in all the different websites. We are confident that we are very competitive to the ones that is with a similar or comparable price range, 800 series SoC. We have also a good confidence that there will be good design, good sockets for the Dimensity 1200 in this year. Of course, I think the revenue will start maybe first quarter? First quarter. First quarter this year, of course, continuing throughout the year and beyond, actually, we're quite comfortable with the progress we're making in this segment. With our continued investment in our higher-end SoC, all the IPs, and leading-edge process technologies, we will continue to produce better and better higher-end SoCs in the coming quarters. Okay. A follow-up to that, and then I'll ask a second question. For the process, where you're on 6-nanometer, how aggressive your plan to get an upgrade moving to five, if some of your mobile product lines may start moving later this year, or you may make a big push next year? That kind of follow-up to that question. We are at the 5- nanometer design, it's nearing tape-out, the 5- nanometer design, in TSMC 5- nanometer design. We are pushing full speed. Okay, great. If I could ask on the seasonality, first quarter being a bit of a growth quarter, can you clarify, is that across all three segments, where you're seeing sequential growth? Then as you look at the full year profile, some of the non-mobile, some of it you could say is more stay-at-home related on some of those product lines. How you're seeing the profile, y ou talked about share gains, if you still expect off of this kind of strong first quarter, still good seasonal ramp through the year on more of the mature and growth product areas. Randy, I think for first quarter, the guidance we've basically [audio distortion] is 8% growth. Basically, we just are seasonal strong. If we dive into the three major product line, I think for mobile, probably is the one with the strongest growth, I think mainly due to the Chromebook and also due to the 5G product cycle. For the growth area, I would say it's also strong as well, r elatively speaking, it's not as strong as the mobile device. For the smart home, basically, there was a normal seasonal pattern. I think that's the situation for the three major business line. Okay. Maybe if you could say the high base, your expectation. Like, seasonally, usually off of first quarter, you are growing into second quarter, but do you expect any different pattern, or given the demand strength and share? It still looks like a pretty good even off the higher level. I think for Q2, again, maybe a little bit too early to talk about Q2. Overall, I feel like, as the CEO, Dr. Tsai, talked about for the full year, we're still looking for a solid growth year. For Q2, even based on a high level of Q1, again, don't take this as a guidance, it's still too early to give our guidance. We still feel there's a pretty good chance we'll still see another quarter of growth for Q2. Okay. Okay, great. The last question I had, circling back to the inventory and supply constraints, your own inventory is still a bit below target level. How are you seeing ability to build back up? Do you expect to stay in these lower levels? You talked about there is supply constraint. Is there a way to think about how much it's limiting shipment or ability to deliver to orders, i f there's a magnitude you're falling short of meeting the demand at this stage? I think David said very well earlier. During this very constrained time, customer certainly will do booking from different suppliers. This is quite understandable, and we are prepared for that. On the other hand, the constraint also limited our ability to meet a customer's "demand" fully. The question is really, our shipments will build a big inventory in a very short time in customers' channels or not. As David said earlier, certainly in the first quarter, we don't see that. How that will all depends on the sell-through, of course, w e watch this every week of our customers' sell-through. We feel, right now, the lower level of the inventory probably will last for another quarter, we believe. Beyond that, the visibility, of course, is not high. The supply constraint situation, we believe, will continue. Okay, n o, great. Thanks a lot, Rick and David. Next in line, Laura Chen, KGI. You're on now, Laura. Hello, Laura, are you with us? I'm sorry. Hi. Can you hear me? Sorry. Okay, w e can hear you now. All right, g o ahead, please. Yes. Also on the supply constraint issue, I was just wondering, how would you prioritize your product timeline, given the tight supply in the upstream side? Would that give us more like a prioritize on higher ASP product, thus we may have better margin looking forward? That's my first question. Laura, it's a complex question. We have several considerations, I'm sure I will not be able to answer your question directly, but several considerations. One is the strategic market position. As we said earlier, both David and I, that this year we are definitely aiming for expanding our stand and expanding our market share in our target strategic areas. That's definitely a major consideration. Second consideration, certainly to optimize the revenue and the profitability. Third consideration, of course, is still the customer relations. I cannot give you a simple answer, but this is what we do just for every two weeks. Okay. Thanks. Yeah. Another question is regarding your recent M&A. I know that you got a few M&A case last year. Can you elaborate more on MediaTek's strategy in the networking space? How that impacts our business in the longer term, and maybe any growth target in this field? With the Intel Enpirion acquisition, basically it's a power IC fitting the high-end FPGA application, especially in the hyperscale data center areas. This is an area that our current power IC business does not have. It really fits our current profile, i t complements our current profile almost perfectly. We went aggressively for it, and we have high expectation, of course, after the closure of the transaction. We have high expectation that this business and the talent will fit well into our current strongly growing power ICs business [so where, if I say we have cycles?] Okay. Will it not also group into our growth of business? How would that impact our maybe potential ASIC business or other application in the networking space? Laura, I think there should be no impact. It's really just different lines of business. If there's any, I think that's complementary because some of the teammate, especially the high-end teammate, we talk about through this acquisition, they're going to get into the data center, the cloud, the infrastructures. We also have a long line of ASIC business working on the same space, but you basically provide different product lines. Right now, actually, we have some synergy and also complementary, for this line business for basically the similar customer. In terms of product, it really is no impact, or no net impact, to be precise. It should be more synergized. Okay, thank you. All right. Ladies and gentlemen, unfortunately, we are lacking time, so we are going to take the last caller. The last one to ask question is Brett Simpson from Arete. Go ahead, please. Yeah, thanks very much. Rick, I had a question about MediaTek's computing strategy. We're seeing Arm CPU starting to make headway in consumer compute. Apple with a Mac going Arm, I think Qualcomm recently has acquired NUVIA, you're making headway, encouraging headway in Chromebook. I just wanted to ask, how do you see MediaTek's position evolving here over the medium term? Do you plan to fully support Windows? We hear a lot about China lineup launches this year, very similar to specs with Chromebook that would port onto your platform. I'm just wondering how you see this, particularly in China. Is there scope to build partnerships around in China, around consumer compute based on Arm? How should we think medium term about the overall strategy? Thank you. We have invested over the years heavily in the Arm-based CPU capability. As you said, we have also made inroads in the different segments. It is our intention, actually more than intention, it's really one of our objectives to expand our penetration into all the segments, which is available for the Arm-based CPUs, Chromebook just being a good example. Whether a Windows-based, I think, that is probably not something we will engage anytime soon, simply because of the huge investment required for the Windows. We also believe strongly that the Arm-based CPU has a really bright future in the computing arena, and MediaTek certainly will play an important, and I hope a very profitable role in that area. Great, maybe just a question for David. David, can you clarify how much of the OpEx in Q4 went to cash staff bonus? Also, can you maybe just lay out the dividend policy now that your EPS is climbing quite sharply? Are you going to stick with the same dividend policy? I think it's about 70% of EPS. Is that still the plan going forward? Thanks so much. Okay. I think for Q4 last year, the overall, the profit, the cash bonus is roughly TWD 38 billion. No, TWD 3.7 billion. Okay. On the dividends? I'm sorry, what d ividends? Sorry. You said TWD 3.7 billion... NT. ...is the OpEx? Okay. That's the profit. That's basically the cash policy, yeah. For the quarter? Okay, super. Dividends, how should we think about dividend policy going forward? I think dividend policy is we haven't actually finalized with our board yet. Normally, is that we won't finalize until maybe sometime in late March or early April. Generally, if you look at our dividend policy in the last few years, I think the payout ratio is roughly in the range of 70%. This year, I think in general, we will be at least maintaining this. In terms of final numbers, please bear with us until we actually have the final word with our board. Okay. Maybe just one final one for Rick. You mentioned in your prepared remarks, Millimeter Wave is something that MediaTek's going to be supporting, I think you talked about commercializing it in 2022. Just love to get your perspective on how you see the millimeter Wave support, d o you think this is going to be a mainstream technology over the next couple of years, and something that we may see in China in due course? Okay. Millimeter Wave technology, I think it all really depends on your definition of mainstream, but it doesn't really matter because MediaTek is committed to deliver Millimeter Wave technology and SoC 2021 and 2022 for revenue. We believe this is one area that we will not be absent. As to China's market, I think it's pretty cloudy, w e cannot tell clearly whether the Chinese will launch major Millimeter Wave applications anytime soon. That does not really change our course from that point of view. Great. Maybe one final one for David on gross margins. There's been a lot of questions about the gross margin in the business. I wanted to home in on the mobile computing division, because we've seen, obviously, a lot of change with the transition from 4G to 5G, t here's more tablet computes this year. I just wanted to understand how the gross margin's progressing in this specific area. Are we seeing progress in gross margin in 2021 in mobile specifically, and how close are we to corporate average gross margin in mobile? Thank you. Well, I think the assumption right now is that even with the gap, I think the gap truly is mild, very small. Otherwise, when we see the huge revenue ramp on the smartphone side, even if there's a big gap between the corporate average versus the smartphone gross margin average, you should see a gross margin actually coming down substantially. Right now, actually, while we are expanding our revenue contribution from smartphone and expanding aggressively on all different addressable markets, we're still maintaining that. You can assume, actually, the gap actually is pretty minimal. Great. Thank you. Okay, ladies and gentlemen, we thank you for all your questions. Now I'm handing it over to Ms. Jessie Wang for closing comments. Ms. Wang, please proceed. Ladies and gentlemen, this concludes MediaTek 2020 fourth quarter conference call. We would like to thank you for your participation, and you may now disconnect. Thank you. Thank you, Jessie. We thank you for your participation in today's conference. You may now disconnect.