Integrated circuit demand picking up

ParisPissoirIntegrated circuit demand in China’s smartphone market is showing signs of a pick-up, at least those trying to sell their products to anyone other than Apple.

Digitimes said that inventories at non-Apple vendors have been getting better, showing signs that business is picking up.

Strong sales of Apple’s iPhone 6 devices in China resulted in excess inventory levels at other mobile device brands in the fourth quarter of 2014, the sources said. However, inventory digestion is near its end, the sources observed.

Downstream clients have stepped up chip orders prior to China’s Labour Day holiday, the sources noted. Rollouts of new smartphones and other mobile devices are also expected to stimulate demand, the sources said.

Taiwan-based IC design houses are expected to see their sales rebound starting March, the sources indicated. MediaTek, for example, will see its March revenues rebound to previous high levels.

MediaTek is expected to report weaker-than-expected performance in the second quarter, if the company fails to generate revenue growth of more than 20 per cent. Such a scenario also implies that overall smartphone demand from China and emerging markets is still grim.

MediaTek has estimated revenues for the first quarter of 2015 will register a 10-18 per cent decline. The company has not given its sales guidance for the second quarter.