MediaTek, the Taiwanese chipmaker best known for its Arm-based smartphone processors, has secured board approval for $5 billion in financing to expand into AI datacentre silicon. The move reflects growing demand for compute power driven by advanced AI models and "agentic AI" systems, which the company's chief executive says represents a significant growth opportunity for both cloud and edge computing markets.

Rather than competing with GPU makers such as Nvidia, MediaTek is focusing on application-specific integrated circuits (ASICs) and believes it can capture 15 to 20 percent of a market it expects to be worth up to $80 billion next year. Its first ASIC family, developed with major US cloud providers, is due to enter production in the fourth quarter of 2026, with a second, more powerful design targeted for high-volume production in 2028. The company expects AI datacentre ASIC revenue to exceed $2 billion this year, though it faces stiff competition from Broadcom, Marvell and Google. MediaTek's Q2 revenue rose just 1.2 percent year-on-year to $4.68 billion, while operating income fell 22 percent to $705 million.