Realtek Semiconductor and its sales agent GMI Technology are poised to benefit from telecom infrastructure upgrades in China, as they have won major procurement bids introduced by China's top-3 telecom carriers, according to industry sources.
The top-3 China-based telecom carriers have stepped up 10G PON (passive optical network) equipment procurement, which is estimated at a total of 12 million sets this year and will boost the adoption rate for 10G offerings to 20% from only 6-8% in 2021, the sources said.
GMI, Realtek's main sales agent in China, has already won orders from four of the eight OEMs contracted by China's top-3 telecom carriers to manufacture 10G PON equipment, the sources indicated. The orders are set to buoy GMI's and Realtek's sales performance in the second half of 2022, the sources said.
In response, GMI said it has been a longtime partner of Realtek. For 2022, GMI has struck guarantee agreements for the supply of Realtek's products such as 10G PON and Wi-Fi 6 SoC chips, according to the IC distributor.
Telecom specs upgrades in China will be stimulating wireless chip demand, said Lewis Lo, president for GMI. Wi-Fi 6 SoC demand for 5G infrastructure in China has been rising, with Taiwan-based network IC suppliers being the largest beneficiary thanks to their focus on high-end products, Lo indicated.
On the other hand, GMI has seen notebook and other consumer electronics IC sales fall dramatically this year. Chip demand for handsets has also been a disappointment thus far in 2022, said Lo, adding that brand vendors have already slashed their sales targets this year by 15-20%.
The overall consumer electrnics demand weakness will have related industry supply chains engaged in inventory adjustments for two to three quarters, Lo continued.
