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Local IC design output down 4% in Q1

BOTTOM OF THE CURVE:Many customers of local IC designers have started rebuilding their inventories, which helped rein in the output decline in the quarter, experts said

Staff writer, with CNA

Production value of the local integrated circuit (IC) design sector during the first quarter fell about 4 percent from a quarter earlier, reflecting the slow season, Digitimes Research said in a research report released on Thursday.

However, as the pace of inventory adjustments in the global semiconductor industry had moderated, the first quarter is likely to be the bottom of the curve for local IC designers, the Taipei-based researcher said in the report.

DESIGNER BUSINESS

In the January-to-March period, output of the local IC designer business totaled NT$119.52 billion (US$3.96 billion), down from the NT$124.53 billion seen in the fourth quarter of last year, but up 19.7 percent from the same period of last year.

Digitimes Research said that Taiwanese IC designers reported month-on-month growth in output in the first three months of the year, with production value in March up more than 15 percent from a month earlier at NT$44.29 billion.

The March data were the highest since January last year.

The researcher said that despite the slow season and fewer working days resulting from the Lunar New Year holiday in the first quarter, many customers of local IC designers started rebuilding their inventories, which helped rein in the output decline in the quarter.

It added that the analog IC design segment even outperformed the entire local IC business to report a 0.5 percent sequential increase in output for the first quarter, while the specialty memory segment reported a smaller fall in output than the overall sector’s 4 percent retreat during the period.

TOP 10

The top 10 IC designers in Taiwan accounted for 70.1 percent of the total output in the local IC business in the first quarter, up from 64.9 percent seen over the same period of last year, the report said.

Digitimes Research said that based on their contributions, these large IC design houses have become the backbone of the local IC design business.

MediaTek Inc (聯發科), the largest IC designer in Taiwan, posted NT$46.01 billion in consolidated sales in the first quarter, up 15.6 percent from a quarter earlier and up 91.9 percent year-on-year on the back of solid global demand for smartphone chips and the company’s efforts to bring smaller rival MStar Semiconductor Inc (晨星半導體) fully under its corporate umbrella.

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