MCU market situation: the market is still adjusting, inventory de-stocking or until next year !
According to Taiwan media reports, although the Chinese Taiwan MCU manufacturers in May revenue has risen, but the market situation seems to remain cold, 618 consumer support or limited, manufacturers are continuing to clear inventory, customers have a basic back to replenish inventory needs, but to have a longer order, visibility is low. The industry believes that the process of inventory de-stocking may be deferred to Q4, or even the first quarter of next year.
Customers replenish inventory, but visibility of long orders is low
According to MoneyDJ, Q2 is traditionally the peak season for MCUs, with demand for some applications warming up. However, MCU market conditions are still cold and the previously anticipated 618 consumer season may not be expected.
Some industry insiders believe that because of the lower prices, customers have a basic need to replenish inventory, but longer orders and visibility are very low. As for June, it may be because April and May have already pulled goods, plus 618 consumption force is difficult to expect, so the short-term is still not optimistic, and such uncertainty will continue to bring to the second half of the year.
On the demand side, there is a gradual warming trend, but the growth rate is not obvious, so the process of inventory removal may be delayed until the fourth quarter, or even the first quarter of next year, before a healthier level is restored, but the price side will remain stable, according to individual products and customer negotiations.
On the price side, MCU prices have not yet hit bottom and inventory levels are still very high, with no sense of bottoming out.
Manufacturers continue to clear inventories
Reflecting the sluggish market conditions, MCU manufacturers in Taiwan continued to clear their inventories. As some of their product line customers have started to respond to the pulling of goods, this has pushed up their operations slightly, including many companies such as Nuvoton, Synnex, Song-Han and Holtek.
However, if we look at the cumulative revenue for the first five months of the year, MCU manufacturers are still experiencing a double-digit annual decline, showing that demand for consumer electronics remains sluggish and manufacturers continue to adjust their inventories.
Nuvoton pointed out that, as the overall economy has not yet warmed up, among the four main product lines, the one with clear visibility is automotive, where the market supply tightness has eased, but the current boom recovery is slower than expected, coupled with competition from the industry, the market will only have a better chance of seeing the market rebound in the third quarter.
Shengqun said that the company is still clearing inventory at this stage, and visibility is uncertain, as the end demand has not yet appeared strong pull force, is expected to clear inventory action, until the end of the year to complete.
Song-Han pointed out that the market for general-purpose MCUs such as small home appliances has not yet warmed up, and the sales of the 618 shopping festival were not popular. Therefore, the company is improving its product portfolio, such as the sales of multimedia products or niche applications, to avoid market competition.
The company's new product line, server cooling fan motor control IC, continues to grow in shipments, and due to the acquisition of SITA, the company's performance has shown a comprehensive effect, showing a "double increase" in monthly and annual revenue in May. In addition, the company continues to ship the cooling fan motor control ICs used in servers, and is optimistic that servers are one of the more growing segments of electronic products this year.
The company's inventory has been decreasing month by month and is expected to return to normal levels by October. The company is also actively adjusting its product lines, and in addition to entering the automotive IC market, it has also achieved a number of results in terms of overseas placement.
In the short term, I am afraid that the gross margin performance in Q2 will not be optimistic due to the high cost and price pressure, but the rate of decline should also be tighter than before. For Taiwan manufacturers, they can only continue to stabilize the subsequent profitability performance through new products.
The industry generally said that there are indeed many new products and new cases in progress, although the initial pulling power of customers is limited, but also a few can look forward to the medium and long-term momentum.
Customers replenish inventory, but visibility of long orders is low
According to MoneyDJ, Q2 is traditionally the peak season for MCUs, with demand for some applications warming up. However, MCU market conditions are still cold and the previously anticipated 618 consumer season may not be expected.
Some industry insiders believe that because of the lower prices, customers have a basic need to replenish inventory, but longer orders and visibility are very low. As for June, it may be because April and May have already pulled goods, plus 618 consumption force is difficult to expect, so the short-term is still not optimistic, and such uncertainty will continue to bring to the second half of the year.
On the demand side, there is a gradual warming trend, but the growth rate is not obvious, so the process of inventory removal may be delayed until the fourth quarter, or even the first quarter of next year, before a healthier level is restored, but the price side will remain stable, according to individual products and customer negotiations.
On the price side, MCU prices have not yet hit bottom and inventory levels are still very high, with no sense of bottoming out.
Manufacturers continue to clear inventories
Reflecting the sluggish market conditions, MCU manufacturers in Taiwan continued to clear their inventories. As some of their product line customers have started to respond to the pulling of goods, this has pushed up their operations slightly, including many companies such as Nuvoton, Synnex, Song-Han and Holtek.
However, if we look at the cumulative revenue for the first five months of the year, MCU manufacturers are still experiencing a double-digit annual decline, showing that demand for consumer electronics remains sluggish and manufacturers continue to adjust their inventories.
Nuvoton pointed out that, as the overall economy has not yet warmed up, among the four main product lines, the one with clear visibility is automotive, where the market supply tightness has eased, but the current boom recovery is slower than expected, coupled with competition from the industry, the market will only have a better chance of seeing the market rebound in the third quarter.
Shengqun said that the company is still clearing inventory at this stage, and visibility is uncertain, as the end demand has not yet appeared strong pull force, is expected to clear inventory action, until the end of the year to complete.
Song-Han pointed out that the market for general-purpose MCUs such as small home appliances has not yet warmed up, and the sales of the 618 shopping festival were not popular. Therefore, the company is improving its product portfolio, such as the sales of multimedia products or niche applications, to avoid market competition.
The company's new product line, server cooling fan motor control IC, continues to grow in shipments, and due to the acquisition of SITA, the company's performance has shown a comprehensive effect, showing a "double increase" in monthly and annual revenue in May. In addition, the company continues to ship the cooling fan motor control ICs used in servers, and is optimistic that servers are one of the more growing segments of electronic products this year.
The company's inventory has been decreasing month by month and is expected to return to normal levels by October. The company is also actively adjusting its product lines, and in addition to entering the automotive IC market, it has also achieved a number of results in terms of overseas placement.
In the short term, I am afraid that the gross margin performance in Q2 will not be optimistic due to the high cost and price pressure, but the rate of decline should also be tighter than before. For Taiwan manufacturers, they can only continue to stabilize the subsequent profitability performance through new products.
The industry generally said that there are indeed many new products and new cases in progress, although the initial pulling power of customers is limited, but also a few can look forward to the medium and long-term momentum.
