Digitimes reports low demand for TFT LCD screens and consumer electronics which use those screens is having a negative impact on some Taiwanese chipset design companies. Digitimes writes:
Due to weak demand for TFT LCD panels and consumers electronics (CE) products, Taiwan IC design house Advanced Analog Technology (AAT) may see its sales decline this quarter, while Novatek Microelectronics, Pixart Imaging (PXI) and Sunplus Technology expect to see slow sales for the third quarter as well.
Shaw-Tzong Liu, general manager of AAT, pointed out that with Taiwan TFT LCD panel makers cutting their output by about 10%, the company's sales will be significantly affected, as its power management ICs for LCD panels account for 80% of the company's sales. Third quarter revenues may decline 10-15% from the second quarter. However, although the company expects its ASP (average selling price) may decrease 2-3% due to cost-down pressure from customers, it will still attempt to maintain a steady gross margin rate, Liu added.
Many of these TFT LCD screens are used in consumer electronics devices. If the economy around the world is in the gutter then demand for these luxury devices will obviously decline. This in turn will have a negative effect right through the channel, from the device manufacturers, to the component manufacturers and the designers. They can wait for things to improve or readjust their focus to designing new chipsets for different applications that are not affected as heavily by the consumer markets. However, choosing to enter a new chipset market is of course easier said than done.
Digitimes: Weak LCD demand to constrain growth at related Taiwan IC design houses
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