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Wednesday, May 23, 2018
Memory Industry News
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Taiwan IC vendors see growth as China further develops smartphone industry


Tuesday, May 15, 2018

Top Taiwanese tech companies lifted revenue more than 8% on the year in April, benefiting from a recovery in orders by Chinese smartphone makers as well as mid- to low-end mobile demand from emerging markets.

Combined April sales reached 854.9 billion New Taiwan dollars ($28.7 billion) for 19 companies monitored by the Nikkei Asian Review, an increase of 8.63%.

The five Taiwanese chip businesses on Nikkei's watch list led the way, boosting revenue nearly 29% to NT$143.46 billion. But these sales climbed from a relatively low base, with Taiwan's flagship semiconductor industry suffering last April as China's smartphone market slowed.

"Since this March, we are seeing Chinese smartphone makers such as Oppo and Vivo start to pull in orders after digesting a serious inventory correction since last year," said Sean Kao, an analyst at IDC. "The recovery provides some restocking demand for components such as semiconductors."

The tech supply chain's main catalyst in the second quarter has been demand for mid- to low-end smartphones in emerging markets such as Southeast Asia and India, Kao said. Mia Huang, an analyst at TrendForce, also cited demand from Chinese brands such as Huawei, Xiaomi, Oppo and Vivo as they attack overseas markets with more cost-effective models.

MediaTek, the world's No. 2 mobile chip provider, enjoyed its first year-over-year growth since February 2017, ending a streak of 13 monthly declines as revenue rose more than 7% in April. The company supplies almost all the major Chinese smartphone makers.

"There is a slowdown in the mobile market for sure," MediaTek CEO Rick Tsai said in late April. "We see only single-digit growth of below 5% for global smartphone shipments for 2018 ... but we see Chinese smartphone makers outperforming their peers."

Taiwan Semiconductor Manufacturing Co., the world's biggest contract chipmaker, increased revenue nearly 44% for April. Advanced Semiconductor Engineering, the world's leading chip packaging and testing company, produced a gain of almost 10%. TSMC and ASE are key Apple suppliers, but they also serve Qualcomm, MediaTek, Huawei's chip unit and many smaller chip designers that supply Chinese mobile gadget makers.

Last April, TSMC and MediaTek suffered double-digit revenue declines compared with 2016.

The best performer in April among the 19 Taiwanese companies was Nanya Technology, the world's No. 4 producer of dynamic random access memory chips behind only Samsung Electronics, SK Hynix and Micron. Nanya's revenue soared nearly 78% on surging DRAM prices and tight supplies in the market.

The weakest performer remained embattled device maker HTC, as revenue dropped more than 55% for a 10th straight month of year-on-year declines. HTC has struggled amid the intense battle in a slowing smartphone industry, while its virtual reality business has yet to bear fruit that would offset the company's lackluster handset sales.

Innolux and AU Optronics, the two leading Taiwanese panel makers, reported revenue declines for April of 30.5% and 11.8%, respectively. Both endured falling average sale prices for displays amid concerns of fierce competition from mainland rivals such as BOE Technology Group and a looming supply glut.

By: DocMemory
Copyright 2018 CST, Inc. All Rights Reserved

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