Taiwan-based chipset vendors VIA Technologies and Silicon Integrated System (SiS), which both posted sequential revenue declines in June, may continue suffering from unimproved performance in July.

Since CPU prices are expected to decline in the end of July, with following PC inventory reductions, the two chipset makers will likely not see their sales increased this month, continuing to suffer from the slowdown in the global PC market, the paper noted. Supported by the new CPU prices and back-to-school demand, the worldwide PC market will start picking up in August, the paper said.

SiS and VIA are estimated to see on-quarter sales drops of respectively 21.6% and 14.5% in the second quarter, the paper added.

According to a recent report done by Fubon Securities, SiS and VIA will continue suffering from chipset price wars in the third quarter of 2006, though motherboard makers are expected to see a strong rebound in shipments. Intel's new desktop platform solutions, which are based around Conroe CPUs, will represent another threat to the two chipset makers, the investment bank said