Elan Microelectronics to Release SoC Chips for Windows 8 on Cost Concern

Dec 20, 2012 Ι Industry In-Focus Ι Electronics and Computers Ι By Ken Liu, CENS
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Taipei, Dec. 20, 2012 (CENS)--Elan Microelectronics Corp. plans to roll out system-on-chip (SoC) version of touch-sensor ICs for Windows 8 laptops in line with demands for less expansive chips from brand-name suppliers of the computers, which are struggling to boost consumption of the computers by providing popularly-priced models.

According to industry executives, demands for Windows 8 laptops are not as vigorous as expected, prompting computer suppliers to cut down prices to stimulate the market.

For this end, brand-name PC suppliers have requested components suppliers, including touch-sensor IC vendors, to pare down their costs.

Elan executives said the company will introduce SoC-based touch-sensor ICs in response to PC suppliers' low-cost requests in consideration of the prevalent belief among the manufacturers that Windows 8's market penetration will climb. They estimated the company to ship around 1.2-1.3 million sets of touch-sensor ICs for Windows 8 computers this quarter alone, lower than 1.5 million sets it projected originally.

The executives pointed out that SoC technology will be helpful in bringing down the cost of touch-sensor ICs as the technology is able to halve the number of the ICs required in a laptop. They stressed that SoC will provide the company with cost advantage and a win-win situation for both the company and its customers.

Last quarter alone, touch-sensor ICs accounted for around 20% of the company's total revenue, with the chips for Windows 8 constituting 7.5% or so of this category. The company estimated touch-sensor IC to rise to comprise a quarter of its total revenue this quarter, with Windows 8 chips increasing to account for 10% of this category.

Although the company's shipments of Windows 8 chips for this quarter are not as strong as expected, its shipments of touch-sensor ICs for tablet PCs and household appliances are brisker than expected, prompting it to maintain the perspective that its revenue for this quarter is likely to stay on par with its Q2 result regardless of the realty that low season usually occurs in the fourth quarter.

In the consolidated revenue for the second quarter this year was NT$1.8 billion (US$65 million at US$1:NT$29). Based on the company's revenue guidance for this quarter, the outcome would be around 7% fewer than NT$2.03 billion (US$70 million) it had last quarter.
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