Whether consumer chip demand can pick up in Q4 will not be determined until October

On August 19, according to DIGITIMES, industry insiders revealed that IC design companies are still cautious about the demand for the year-end shopping season this year, given the uncertainty of order visibility.

Fabless chip makers agree that restocking demand from PC customers is unlikely to pick up significantly until at least 2023, the sources said. Demand for commodity PC-related chips will remain subdued through the fourth quarter of this year.

It remains to be seen whether the upcoming iPhone will spur demand for chips throughout the phone, the sources said. Weak sales of Android smartphones in China during the Double 11 shopping festival also prompted Fabless chip makers to be conservative about sales. In addition, during this year's 618 online shopping period, the sales of Android phones were also sluggish.

At the same time, sources have pointed out that demand for back-to-school has also been disappointing so far. The market for educational PCs and other mass-market electronic devices is becoming increasingly saturated.

Whether demand for chips for mobile phones, PCs and other consumer electronics equipment will pick up in the fourth quarter may not be known until October, according to the sources. When the new iPhones will hit the shelves, Chinese distributors will make purchasing decisions for the upcoming shopping season.

"As the momentum of the smartphone, PC and consumer end markets slows down rapidly, the supply chain of related industries will participate in inventory adjustments throughout the second half of 2022," TSMC CEO Wei Zhejia said on the July earnings conference call. The adjustment is justified after two years of coronavirus-driven stay-at-home demand.