With the AI and 5G markets set to flourish, chip demand for HPC, IoT and cloud servers is expected to enjoy substantial growth in 2019, according to sources at Taiwan-based IC distributors.

While encountering deceleration in the smartphone market, these IC distributors are positive about growth arising from demand by HPC, IoT and cloud computing applications in the AI and 5G areas next year, the sources indicated.

Taiwan-based IC distributors are generally cautious about handset related IC demand during the first half of 2019, said the sources, adding that many of the firms have moved to enhance their offerings for non-handset applications or diversify further their product lines. Their product focus for 2019 has shown that chip demand for 5G infrastructure, and demand for AI chips including HPC, cloud and edge computing, IoT will be the key to driving their performance next year.

WPG and Edom Technology have reported sequential increases in consolidated revenues for November 2018 of 4.1% and 4.9%, respectively, while revenues at WT Microelectronics, Supreme Electronics and Answer Technology (ANStek) fell about 1%, 4.4% and 25.3%, respectively.

WPG, Asia's largest IC distributor, announced November consolidated revenues of NT$46.65 billion (US$1.51 billion). Consolidated sales for the first 11 months of 2018 totaled NT$507.49 billion, rising 3.3% on year.

WT Micro, which counts Skyworks as a major supplier, disclosed consolidated revenues climbed 54% from a year earlier to NT$31.4 billion in November 2018. WT Micro's cumulative 2018 revenues through November surged 48% from a year ago to NT$250.7 billion.

Edom, which also distributes chip components for Skyworks, posted consolidated revenues for November 2018 increased 12.7% on year to NT$7.52 billion. Edom also distributes products for chip vendors such as Ams, NXP and STMicroelectronics, and Sony's automotive CMOS image sensors.

Edom said previously the company will lower the sales proportion for the communication chip segment to about 50% from over 60% in 2019, while sales generated from the networking chip and automotive sectors will climb substantially as a proportion of company revenues next year.

For ANStek, which distributes mainly analog ICs for Analog Devices (ADI) and FPGA chips for Xilinx, the company is expected to put focus on the AI, cloud computing and 5G related products in 2019, according to company sources. Meanwhile, Supreme Electronics is positive about memory demand for servers and other cloud computing applications next year. Supreme sells memory devices and display panels for Samsung Electronics in Greater China.

By: DocMemory
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