MediaTek, the world's largest maker of semiconductors for DVD players, said it will introduce its first mobile-phone chips in the current quarter to widen the company's product range and boost profit.
"The chips will start contributing to revenue by next year," MediaTek chairman Tsai Ming-chieh said in an interview at a chip industry conference near company headquarters in Hsinchu.
MediaTek said it has two customers for the chips, both handset makers in Taiwan.
MediaTek is counting on new products to maintain profit growth as competition increases for DVD player chips, which account for most of its sales.
The company this year started selling chips for DVD recorders after introducing new semiconductors for the DVD player market last year.
MediaTek's profit grew 83 percent last year after more than doubling in 2001. The company's shares have risen 83 percent this year, against a 32 percent rise on the TAIEX.
The company said on May 16 it aimed to sell its first handset chips by the middle of this year. The chips are designed to work with phones based on the global system for mobile communications, or GSM, standard that's used in most of the world.
MediaTek will offer digital signal processors, the "brains" of a mobile phone, in competition with makers such as Texas Instruments Inc, the No. 1 supplier, Motorola Inc and Analog Devices Inc. The Taiwanese company is also selling a chip that transmits phone signals.
The new products will be a "stepping stone" to making chips for phones that allow faster wireless access to the Internet, the company said.
MediaTek said that it plans to sell mobile-phone chips to many of its existing customers in China, the world's biggest market for handsets.
MediaTek last year became the first company to offer one chip for DVD players that combines the functions of several, helping DVD-player makers cut production costs.