Global Unichip, an IC design service provider partnering with Taiwan Semiconductor Manufacturing Company (TSMC), has said revenues may decline by more than 10% sequentially in the first quarter of 2011 due to slow seasonal demand for turnkey solutions. However, gross margin for the quarter will likely rebound to over 20% on rising proportion of revenues for non-recurring engineering (NRE) designs.

Global Unichip generated revenues of NT$2.79 billion (US$95 million) in the fourth quarter of 2010, up 1% sequentially and hitting a quarterly high. But gross margin slipped 0.5pp to 18.5% in the fourth quarter.

For all of 2011, Global Unichip expects to see moderate growth. Demand coming from the smartphone and tablet PC sectors will outperform other market segments.

Global Unichip has secured orders for chip solutions used in Android-based tablets from three customers, said company president Jim Lai, adding that mass production for one of those clients began in the fourth quarter of 2010.

In addition, Global Unichip has started delivering chips in small volume for smartphones, Lai added.

Global Unichip saw revenues climb to an all-time high of NT$10.27 billion in 2010, up 24%. Net profits for the year, however, grew only 6% to NT$605 million.

Despite the record sales, Global Unichip's profit performance was a bit disappointing, company chairman FC Tseng indicated. Tseng expects new chip solutions for handset, tablet and smart TV applications to drive the company's growth over the next three to five years.

(Left to right) Global Unichip chairman FC Tseng, president Jim Lai
Photo: Terry Ku, Digitimes, February 2011