Texas Instruments (TI) reportedly plans to cut prices for its analog ICs again soon following a reduction launched in August – a move which is design to counter the aggressive pricing strategies adopted recently by Taiwan-based IC design houses, according to industry sources.

TI's move will also affect gross margins of Taiwan-based design houses who are also expected to continue to keep their prices at relatively low levels in order to remain competitive, said the sources.

Sources at IC distribution channels also noted that TI's 12-inch wafer foundry plant is ready to enter volume production which will allow the US-based chip vendor to more effectively leverage its aggressive pricing strategy, noting that TI may start lowering the prices of its MOSFET devices.

On the other hand, Taiwan-based Global Mixed-code Technology (GMT) has also adopted aggressive pricing to expand its share in the Taiwan and Korea markets, with the prices for its analog ICs tagged at only 80% of quotes of similar products offered by first-tier players.

Facing competition from vendors abroad and at home, Taiwan-based analog IC makers are expected to see their gross margin rates to fall to 30-35% on average compared to 40% recently.

By: DocMemory
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