MediaTek has seen its inventory level for handset application processors (including 4G and 5G ones) swell to 160-180 days from past regular levels of around 100 days, due mainly to lackluster demand from Chinese handset vendors, according to sources at IC backend houses.
MediaTek maintained its handset AP inventory remains at about 100 days, a figure that it had disclosed during its fourth-quarter 2021 investors conference in January.
Chinese handset brands including Oppo and Vivo have adjusted their shipment projections downward for 2022, and market researchers have also estimated the year's global smartphone shipments will stay flat relative to 2021 or grow only slightly amid unstable global market conditions, the sources said.
MediaTek has adjusted its product portfolio strategy since the fourth quarter of 2021, allocating more foundry and backend capacities for Wi-Fi SoCs, networking ICs, power management ICs (PMICs), server chips, and automotive peripheral chips in response to reduced demand for handset APs, the sources noted, and the strategy will last till the end of the second quarter.
As chip demand for consumer electronics devices such as handsets, notebooks, and TVs has slowed down notably following two years of sharp increases, digesting inventory and adjusting product portfolios have become major tasks for MediaTek and other supply chain players during the first half of the year, the sources continued.
Taiwan's OSATs including ASE Technology, King Yuan Electronics, and Sigurd Microelectronics share the view that their backend businesses for handset, notebook, and TV applications can hardly grow in the first half of 2022, while it remains to be seen whether new iPhone SE3 and new Android handset models can bring some growth momentum.
OSATs are slowing down their wirebonding capacity expansions for consumer ICs, but their backend orders for processing Wi-Fi 6/6E core chips, server chips, and HPC chips continue to increase from major chipmaking clients such as AMD, Nvidia, Broadcom, Qualcomm, and MediaTek.
In particular, ASE's advanced FOCoS and FO-EB technologies continue gaining popularity with vendors of midrange and high-end service chip solutions, and the company is also set to expand its mainstream flip chip (FC) packaging capacity in 2023, the sources said.
Article translated by Willis Ke
