IC Design Factories Receive Short-term Rush Orders While Long-term Demand Remains Weak

In recent times, several IC design factories in Taiwan, including the leading laptop touch chip manufacturer ELAN and second-tier IC design companies such as SunplusIT, Novatek, and Weltrend, have started to receive short-term urgent orders while long-term order demand remains weak.

Some of the inventory has been gradually depleted, and there is a small amount of inventory replenishment demand for laptop and mobile phone related applications. This presents a small opportunity for electronic component distributors to provide timely solutions for their clients.

ELAN and other IC design companies have reported short-term, small-quantity urgent orders for high-end laptop and IT applications this quarter. Although Q1 is traditionally a slow season, ELAN estimates that single-season revenue is expected to remain flat or even slightly grow compared to the previous quarter.

SunplusIT, another IC design company that focuses on laptop applications, has also received several urgent short-term orders for laptop touchpad modules, touchscreen ICs, and fingerprint identification product lines. Novatek and Weltrend, which specialize in applications for mobile phones and gaming consoles, have also received orders for HD version touch control and integrated driver ICs.

Previously, inventory levels rapidly increased as demand decreased. However, with limited visibility and a reluctance among clients to place long-term orders, some IC design factories have adopted a wait-and-see approach, allowing clients to place orders first and avoiding overstocking to mitigate potential market fluctuations.

Electronic component distributors may benefit from this opportunity by actively engaging with these IC design companies and providing timely solutions for their clients' urgent orders. Additionally, with the recent easing of travel restrictions in mainland China, there is potential for a rebound in market demand in the near future. Electronic component distributors should continue to monitor market developments and adjust their strategies accordingly.