Texas Instruments (TI) second-quarter 2024 financial data indicates that overall demand for analog ICs was robust during the quarter.
The demand for analog ICs was consistent with previously suggested financial estimates. Consumer electronics applications finished inventory destocking, resulting in rather strong restocking momentum, according to market sources.
Strong demand from China
TI's revenue in the Chinese market performed well. TI is also optimistic that analog ICs will continue to recover once more applications and markets finish inventory adjustments. Related Taiwanese analog IC players echo this sentiment and expect conditions to improve through the traditional peak season in the second half of 2024.
Taiwanese analog IC players believe that the situation for different applications and market customers slightly varies, but TI's observations align with current feelings. While restocking demand for consumer applications was decent in the second quarter, the majority of demand came from China. Shipments for other applications and markets in the second quarter were relatively flat.
The revenue performance among Taiwanese power management IC (PMIC) players varied in the second quarter, tied closely to actual application demands. Chinese PMIC maker Silergy saw revenue growth in the second quarter that far exceeded that of all small and mid-size Taiwanese manufacturers. This also supports TI's observation that the replenishment demand from China was strong.
PMIC market sources pointed out that the restocking demand for PMICs and overall analog ICs in China was very conservative from 2023 until early 2024. Demand did not pick up significantly until March of this year.
Some logic IC manufacturers also saw a substantial inventory restock in the second quarter, noting that the pull-in momentum by certain Chinese consumer electronics customers was stronger than expected.
Differing opinions on 2H24
However, opinions as to whether this is good or bad for market conditions in the third quarter differ. Those with a pessimistic view believe the replenishment wave in the second quarter could be an early response to orders, potentially leading to weaker-than-expected pull-in momentum in the traditional third-quarter peak season. Those with a more optimistic view believe various applications and markets will gradually start restocking inventory and pulling in orders for new products during the traditional peak season, which could lead to the third quarter outperforming the second.
Actual pull-in momentum ultimately depends on customers' assessments of the end market, according to industry players. At this stage, aside from a few products related to AI, other application customers have relatively limited to grasp on to.
Since early 2024, industry observers have noted that even with the boost from AI this year, the actual shipment scale and penetration rate of AI-related products have yet to reach the level of mainstream products. Therefore, it would already be considered a success if the traditional peak season in 2024 achieves the existing basic scale and performs better than in 2023.
While it was suggested that the PC supply chain might have seen early pull-ins in the second quarter, the momentum was not as extreme as anticipated. However, considering customers' attitudes toward pull-ins have frequently shifted in recent years, the possibility that the traditional peak season will not meet expectations can also not be ruled out.
Article translated by Eifeh Strom
