Powertip Technology has reported that demand for handset-use TFT LCD modules (LCMs) in China is picking up, as inventory issues hitting the market are being solved.

The Taiwan-based LCM supplier said earlier in the first quarter the market was affected by inventories built up at makers who had over-stocked TFT array-process panels amid worries of a shortage of the component. But as demand is picking up in China, the inventories will be gradually cleared, the company remarked.

The company also revealed that its shipments to the STN segment are also growing although their proportion of the company's overall sales is decreasing.

STN LCMs have a relatively lower average selling price (ASP) and orders usually come in small volumes and a large variety. But the STN segment, which offers better margins than the TFT segment, remains a chief business for Powertip, the company said.

Powertip currently runs two production bases in China, one in Dongguan for the STN segment and the other in Zhenjiang for the TFT LCD segment.