A price war between Taiwanese and Chinese suppliers of MCUs for consumer applications will persist in the first half of 2023 as they remain under pressure to trim inventories amid sluggish demand for notebooks, desktops and other consumer electronics devices, according to industry sources.
With their clients and channel distributors still logging high inventory levels, Taiwan's MCU vendors are gearing up destocking efforts by cutting quotes or production capacity. They include Holetek Semiconductor, Nuvoton Technology, Generalplus Technology, Nyquest Technology, Padauk Technology, Sonix Technology, Megawin Technology, Hycon Technology, and Weltrend Semiconductor.
These suppliers, however, have recently seen a surge in rush orders from China for medical applications, as demand for oximeters and oxygen generators has increased sharply on the rapidly soaring COVID infections in China since its strict pandemic control policy was loosened at the end of 2022, the sources said, adding that the policy relaxation is expected to help suppliers accelerate inventory depletion.
Statistics from IC Insights showed that the world's top-five MCU vendors in terms of sales value in 2021 were all IDMs, namely NXP, Microchip, Renesas, STM, and Infineon. And Nuvoton was the only Taiwanese maker on the top-10 list, while GigaDevice Semiconductor was the Chinese supplier closest to the top-10 ranking.
GigaDevice has entered volume production of a variety of MCUs for mainstream industrial control, IoT and consumer applications. The company is aggressively proceeding with deployments in high-end MCU chips for use in new energy vehicles, sources said.
Other Chinese MCU suppliers are mostly dedicated to consumer applications, especially smart wearable devices and IoT systems, which enjoy the largest demand in the China market.
According to HIS Markit, China's MCU market topped US$36.5 billion in 2021, up 35.8% on year, and is estimated to absorb 30% of the global supply by 2025 based on a CAGR of 6.2% in demand during 2021-2025.
Article translated by Willis Ke
