China smartphone vendors step up pace of 4G chip orders, say sources

Cage Chao, Taipei; Jessie Shen, DIGITIMES Asia 0

Taiwan-based IC design houses have seen a strong pull-in of orders for 4G mobile chips recently from their China-based handset clients, with the orders being placed at a much more rapid pace than those for 5G chips, according to industry sources.

Prices for 4G mobile chips have also been rising recently, and are expected to see a short-term rally, the sources indicated.

The supply of 4G mobile chips will be lagging behind demand throughout the second half of 2021, said the sources, adding that chip suppliers have had relatively low inventories for 4G smartphones compared with those for 5G ones.

Xiaomi, Oppo and Vivo have all stepped up their chip purchases for 4G smartphones rolled out in emerging markets since the third quarter, as they are aware of shrinking profits generated from the 5G smartphone segment where competition becomes fierce and is dragging down related mobile chip prices, the sources noted.

These China-based smartphone vendors have also had excess levels of 5G chip inventories due mainly to disappointing sales in their home market in China during the first half of this year, the sources said.

MediaTek and fellow Taiwan-based IC design houses including Novatek Microelectronics, Sitronix Technology, Leadtrend Technology, Sensortek Technology are all expected to generate more profits from orders for 4G smartphones than those for 5G ones in the second half of 2021, according to the sources.