Taiwan IC design houses likely to enjoy strong 4Q20

Taiwan-based IC design houses, led by MediaTek, are expected to enjoy a particularly strong fourth-quarter 2020, thanks to the coronavirus pandemic causing delays of new product launches, according to market observers.

The pandemic, which has been stimulating chip demand for notebooks, PCs and other devices enabling remote work and education, will be another positive contributor to those fabless chipmakers' sales in the fourth quarter, the observers indicated.

Meanwhile, pure-play foundries have also seen demand from Taiwan-based fabless firms ramp up, filling their fab capacities, the observers said. In particular, the foundries' 8-inch fabs are running run at full capacity.

Taiwan-based IC design houses, particularly those specializing in PC and PC peripheral applications, have been queuing up for support from their foundry partners, seeking to secure capacity through the fourth quarter of this year, the observers noted.

MediaTek continues to ramp up wafer starts at foundries despite the loss of Huawei orders, the observers continued. MediaTek is among Huawei's suppliers which will be affected by fresh US sanctions against the China-based vendor and its affiliates.

MediaTek has been scaling up substantially its 5G SoC shipments, while the company's ASIC business is about to see shipments peak on seasonal factors, the observers said. The chipmaker is expected to see its sales growth momentum continue in the fourth quarter.