Makers in the handset supply chains in Taiwan and China are becoming more conservative about building up inventories for parts and components due to intensifying competition in the China market as a result of the release of the iPhone SE, according to sources from Taiwan's handset supply chain.
The launch of relatively low-priced iPhone SE in China has squeezed market share from local brands, including Huawei, Xiaomi Technology, Vivo and Oppo, affecting the earning performance of these brands, said the sources.
Some camera modules makers said they were exposed to a high level of inventories in 2015 during which they were required by handset brands to pile up inventories amid rosy shipment prospects. However, most brands shipped only 70-80% of their shipments projected for the year.
As a result, camera module suppliers have been conservative about brand vendors' recent efforts to launch smartphones with dual lenses, commented the sources.
Apple's recent efforts to upgrade the internal voltage of its power supply devices from 15 volts to 20 volts to improve charging efficiency has also left power supply makers with excessive inventories. Meanwhile, IC suppliers have also been pushed to develop new power management (PWM) ICs to meet Apple's new requirments, added the sources.
The risk is high now for PWM IC suppliers to suffer from high inventory levels due to volatile market conditions, said the sources.
