MediaTek has notified its China-based smartphone clients that it will scale down shipments of 4G chips in 2021 due to tight capacities at foundry houses, according to industry sources.
The notification echoes an earlier company statement that it will give shipment priority to 5G chips that carry higher margins than 4G ones, as it seeks to sustain sales and profit growths in 2021.
Meanwhile, other IC suppliers have also adopted similar strategies to focus on niche products and prioritize the production and shipments for the primary clients and markets due to tight foundry capacity.
These vendors have no choices but to do so because most of them have seen orders far exceed their capacity, the sources said.
Furthermore, the sources said some brand vendors and OEMs are likely to be forced to delay production or shipments starting late second-quarter 2021 due to the shortages of crucial parts and components.
Taiwan-based networking device makers have begun to feel the pinch from the short supply of network chips, said the sources, noting that the leading chip providers such as Qualcomm and Broadcom reportedly already have extended their delivery lead times for related chips to 40-50 weeks.
