Demand for feature phones in China has turned weaker than expected since the middle of October, according to sources at Taiwan's LCD driver IC design houses. Smartphone demand in China is also slowing down recently, bringing further adverse impact to some firms' sales performance, the sources indicated.

The slowdown in orders reflects an early arrival of the low season, the sources observed.

Many of Taiwan's handset chip suppliers which rely heavily on the China market are likely to report 5-10% sequential decreases in December revenues, the sources estimated, citing falling demand from the region. Sales might further decline 10% or more sequentially in the first quarter of 2012, as a result of fewer working days during the long Chinese New Year holiday and seasonality, the sources noted.

However, most of Taiwan's handset chip designers will see their sales recover starting the second quarter of 2012 when China-based handset firms' inventories will be low, the sources said.

Source:digitimes