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Local IC design output tumbles 4% on-quarter after slow season: report

TAIPEI, Taiwan -- Production value of the local IC design sector for the first quarter fell about 4 percent from a quarter earlier in reflection of the slow-season effect, according to a research report released Thursday.

In the report, Taipei-based Digitimes Research said, however, that as the pace of inventory adjustments in the global semiconductor industry had moderated, it expects that the first quarter will be the bottom of the curve for local IC designers.

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

The first-quarter figure, however, was up 19.7 percent compared with the same period of last year and the research group said the local IC design industry's growth remained on track.

IC Design Revenues Set Monthly High

Digitimes Research said that Taiwanese IC designers reported month-on-month growth in output in the three months of the quarter, with production value in March up more than 15 percent from a month earlier at NT$44.29 billion. The March data was the highest since January 2013.

The research group said that despite the slow-season effect 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 to 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.

Big Players Get 70% of the Pie

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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