With pure-play foundries initiating another price hikes to reflect their continued tight fab capacities, many Taiwan-based IC design houses are finding it increasingly difficult to maintain gross margin, according to industry sources.

The fabless chipmakers, particularly those specializing in display driver ICs, have seen their customers become reluctant to accept further price hikes, the sources said.

For first-tier players, such as MediaTek, Realtek Semiconductor and Novatek Microelectronics, they are more capable of raising quotes and will manage to outperform smaller Taiwan-based peers in profit growth amid rising costs and supply chain challenges, the sources indicated.

While many of Taiwan's fabless chipmakers are struggling to maintain gross margin, MediaTek and other first-tier players will be able to generate impressive profit results in the fourth quarter of 2021 and the first quarter of next year, the sources said.

Companies relying less on demand for TVs, Chromebook and other PCs will also be capable of maintaining gross margin in the fourth quarter, the sources believe. Particularly for those still experiencing supply-side constraints, such as networking chip suppliers and power management IC specialists, they remain capable of passing increased manufacturing costs onto their customers, the sources said.

By DIGITIMES