Despite reports of brisk retail sales in the US during the Thanksgiving weekend, Taiwan's fabless IC companies and contract manufacturers do not expect a short-term rebound in orders, according to industry sources. The low season in the first quarter of 2012 has been discouraging their clients from placing solid orders, the sources said.

Taiwan Semiconductor Manufacturing Company (TSMC) has also been experiencing a general slowdown in customer orders, the sources indicated. Revenues at the foundry are likely to register on-month drops in November and December, the sources estimated.

Sources at Taiwan-based analog IC suppliers have expressed concerns that unfavorable macroeconomic conditions have led to a fall in consumer confidence, and therefore clients have been cautious about rebuilding inventories. Most Taiwan-based IC designers will post revenue declines of 5-20% sequentially in the fourth quarter of 2011, the sources said.

However, for chip suppliers focused more on the China market, an influx of short lead-time orders is expected to buoy sales performance during the last two months of 2011, the sources said.

Several OEMs in China reportedly have started building chip stocks and replenishing inventories since the middle of the fourth quarter, bracing for reduced supplies caused by fewer working days in the first two months of 2012, and possible labor shortages following the Lunar New Year holiday.