TAIPEI, May 6, 2024
/PRNewswire/ -- Inventory adjustments for analog chips across all
device applications have been completed, and shipments to specific
customers and product lines have resumed their upward trajectory,
according to sources at analog IC suppliers.
According to the news report from the technology-focused media
DIGITIMES Asia,Texas Instruments (TI) pointed out that in addition
to inventory levels in the consumer market returning to normal,
supply chain inventory destocking in application markets, such as
automotive and industrial control, has entered the final stage.
Taiwanese IC design houses believe that despite overall demand
for analog ICs remaining sluggish, inventory levels have
generally returned to normal. Shipments are expected to return
to their normal cycle, experiencing more significant growth in the
traditional peak season in the second half of 2024.
As the leading manufacturer in the analog IC market, TI's market
observations and related statements have always been seen as
important indicators by industry players. Many players whose
product lines do not directly compete with TI will still consider
its observations when drawing up their next strategy.
Subsequent demand depends on multiple factors
TI's comments on inventory destocking for automotive and
industrial control applications coming to an end are more positive
compared with the highly pessimistic statements from the previous
quarter. However, relevant Taiwanese players stated that the actual
pace of demand recovery still depends on each application and
customer situation.
It was also pointed out that the end of inventory adjustments
does not mean subsequent demand will be strong. Still, TI
anticipates that shipments this year will grow compared with last
year.
Taiwanese Power Management IC (PMIC) makers said that whether
actual demand would increase this year would depend on the
traditional peak season in the second half of 2024. It would also
depend on customers' willingness to introduce new high-standard
products.
If the momentum of new product introductions is insufficient,
achieving significant growth this year will be difficult. However,
based on the current market conditions, the growth momentum of
high-end consumer electronics products may outperform that of
entry-level and midrange products. Shipment momentum for new
high-end products with higher unit prices may further expand this
year.
Sources familiar with PMIC players said that Taiwanese companies
of all sizes are focusing on shipment stability this year and are
not expecting to see significant growth. In 2024, they will
concentrate on expanding high-end technologies and new businesses,
which they hope will bring forth the next wave of growth.
Demand for price reductions
It is worth noting that during its financial report meeting, TI
stated that current chip prices have returned to the pre-pandemic
price reduction pattern. Prices will continue to fall by a low
single-digit percentage.
Taiwanese PMIC manufacturers observed strong demand for price
reductions by customers as early as last year. Customers not only
requested that price reductions return to pre-pandemic levels, but
actively asked that actual prices also return to pre-pandemic
levels.
However, PMIC players admitted that unlike TI, which can reduce
costs and increase wiggle room through the IDM model,
IC design houses find it hard to meet customers' demands to lower
prices because wafer foundry costs remain higher than before the
pandemic.
In terms of the price competition
pressure brought on by TI, most Taiwanese PMIC makers
point out that TI is focusing on the automotive and industrial
control markets these days, and they rarely run into TI in the
consumer market. Most of the companies competing with TI on price
now are Chinese manufacturers. The impact on Taiwanese
manufacturers has been limited.
Even so, due to the relatively weak demand in the automotive and
industrial control markets, coupled with the impacts from outside
factors such as decoupling from the US and China and diversifying supply chains, the
competition for market share is no longer purely driven by price.
As such, TI's price-cutting strategy seems to be showing signs of
slowing.
Major Taiwanese PMIC players include Global Mixed-Mode
Technology, Anpec Electronics, Leadtrend Technology, uPI
Semiconductor, and M3 Technology. Taiwanese companies with PMIC
businesses include MediaTek and Fitipower Integrated
Technology.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/digitimes-asia-analog-ic-inventory-returns-to-normal-levels-302136376.html
SOURCE DIGITIMES ASIA