Taiwanese IC design houses have announced that inventory adjustments for analog chips across various device applications have been successfully completed. As a result, shipments to specific customers and product lines have resumed their upward trajectory. This news comes from sources in the analog IC supplier industry, citing a report from technology-focused media DIGITIMES Asia.
Texas Instruments (TI), a leading manufacturer in the analog IC market, has provided insights on the current market conditions. TI’s observations and statements are highly regarded by industry players, influencing their strategies. While overall demand for analog ICs remains sluggish, inventory levels are returning to normal, and shipments are expected to follow their usual growth cycle. A more significant growth surge is anticipated in the second half of 2024 during the traditional peak season.
Despite the positive outlook, Taiwanese players highlight that the pace of demand recovery will vary based on each application and customer situation. The end of inventory adjustments does not guarantee strong subsequent demand. However, TI forecasts growth in shipments compared to the previous year.
Taiwanese Power Management IC (PMIC) makers emphasize that the actual demand increase will depend on the second-half peak season and customers’ willingness to introduce new, high-standard products. The success of achieving significant growth this year hinges on sufficient momentum in new product introductions. High-end consumer electronics products might outperform entry-level and midrange products, further expanding shipment momentum for new high-end products with higher unit prices.
The Taiwanese PMIC industry aims to focus on shipment stability in 2024 without expecting significant growth. Instead, companies of all sizes intend to concentrate on expanding high-end technologies and exploring new businesses for future growth opportunities.
Regarding pricing, TI disclosed during its financial report meeting that chip prices have returned to the pre-pandemic pattern of gradual reduction. Taiwanese PMIC manufacturers have observed strong demand for price reductions from customers, requesting that prices return to pre-pandemic levels. However, meeting these demands is challenging for IC design houses due to higher wafer foundry costs.
While TI’s price-cutting strategy exerts pressure on Taiwanese PMIC makers, the competition for market share is becoming less focused on price alone. With weaker demand in the automotive and industrial control markets and the influence of factors like decoupling from the US and China, the market competition landscape has shifted. Price-cutting strategies are showing signs of slowing.
Key Taiwanese PMIC players include Global Mixed-Mode Technology, Anpec Electronics, Leadtrend Technology, uPI Semiconductor, M3 Technology, as well as MediaTek and Fitipower Integrated Technology, which have PMIC businesses.
Source: DIGITIMES ASIA
According to the article, inventory adjustments for analog chips across various device applications have been completed successfully by Taiwanese IC design houses. This has resulted in shipments to specific customers and product lines resuming their upward trajectory. While the overall demand for analog ICs remains sluggish, inventory levels are returning to normal, and shipments are expected to follow their usual growth cycle. The second half of 2024 is anticipated to see a significant growth surge during the traditional peak season.
However, Taiwanese players note that the pace of demand recovery will vary based on each application and customer situation. The end of inventory adjustments does not guarantee strong subsequent demand. Texas Instruments (TI), a leading manufacturer in the analog IC market, forecasts growth in shipments compared to the previous year. Taiwanese Power Management IC (PMIC) makers emphasize that the actual increase in demand will depend on the second-half peak season and customers’ willingness to introduce new high-standard products.
The success of achieving significant growth this year for Taiwanese PMIC makers hinges on sufficient momentum in new product introductions. High-end consumer electronics products are expected to outperform entry-level and midrange products, leading to increased shipment momentum for new high-end products with higher unit prices. The Taiwanese PMIC industry aims to focus on shipment stability in 2024 without expecting significant growth. Instead, companies plan to concentrate on expanding high-end technologies and exploring new businesses for future growth opportunities.
In terms of pricing, TI disclosed that chip prices have returned to the pre-pandemic pattern of gradual reduction. Taiwanese PMIC manufacturers have observed strong demand for price reductions from customers, requesting that prices return to pre-pandemic levels. However, meeting these demands is challenging for IC design houses due to higher wafer foundry costs.
While TI’s price-cutting strategy exerts pressure on Taiwanese PMIC makers, the competition for market share is becoming less focused on price alone. The market competition landscape has shifted with weaker demand in the automotive and industrial control markets and the influence of factors like decoupling from the US and China. Price-cutting strategies are showing signs of slowing.
Key challenges and controversies associated with the subject include the varying pace of demand recovery, the need for sufficient momentum in new product introductions for growth, and the challenge of meeting customer demands for price reductions while facing higher wafer foundry costs. Furthermore, the shifting market competition landscape and the diminishing focus on price alone raise questions about the strategies that IC design houses should adopt to maintain or increase their market share.
Advantages of the completion of inventory adjustments for analog chips include a return to normal inventory levels, resumed upward trajectory in shipments, and expected growth in shipments compared to the previous year. Taiwanese PMIC makers focusing on high-end technologies and exploring new businesses provide opportunities for future growth.
Disadvantages include the potential variability in demand recovery based on individual applications and customer situations, the challenge of meeting customer demands for price reductions while facing higher wafer foundry costs, and the shifting market competition landscape away from price-centric strategies.
For further information on Taiwanese IC design houses, industry players, and related news, you can visit the DIGITIMES Asia website: DIGITIMES Asia.