Taiwan’s consumer IC design houses such as Sunplus Technology, Sonix Technology and Tontek Design Technology have started reporting a recovery of orders, as good Christmas sales in the European and US markets and the approaching Chinese New Year holiday in the East Asia region help push up demand.
Encouraged by the stronger demand, the IC designers are now more optimistic about their business in the first quarter and even expect to see a V-shaped rebound for first-half revenues.
Taiwan’s consumer IC design companies had suffered hard from the effect of the September 11 terrorist attacks, as the incident happened just a few months before the Christmas season. Pessimistic about Christmas business, manufacturers and distributors of consumer products had slashed their orders. As a result, sales of many Taiwanese consumer IC design companies saw considerable declines.
However, as the war between the US and Afghanistan has come nearly to an end earlier than expected, and the overall business outlook for 2002 has become more positive, Christmas sales in the European and US markets turned out to be better than consumer product manufacturers’ forecasts in September. There was even a shortage of some hot products in certain areas.
With the good sales and stringent control of orders in the fourth quarter, consumer IC designers said that they are quite sure that their clients do not have much inventory on hand. Judging from the recently increasing orders, companies estimated that they should be able to maintain first-quarter revenues at the same level as the previous quarter, despite there being fewer working days in the current quarter.
Given that the second quarter is usually the peak season for inventory build-up in the consumer product market, consumer IC designers are even more optimistic about second-quarter sales.
Article translated by Christy Lee and edited by Richard So
