Nokia to increase handset chip orders in March

Nokia has notified chip suppliers that it will increase orders in March, a sign showing that handset demand may be recovering, according to market sources.

Although Nokia has reported 70% profit decline for the fourth quarter of 2008 and is not optimistic about the first-quarter outlook, it has told chip suppliers that it wil increase orders in March mainly for new models expected to ship in the second quarter, the sources claimed. As Nokia is going to launch several 3G and 3.5G products with multi-touch and multimedia functions in 2009, Qualcomm, Texas Instruments (TI) and Synaptics are expected to be beneficiaries of the increased orders, the sources noted.

There have been other signs that the handset market may be recovering earlier than other sectors. In China, holiday shopping during Chinese New Year has helped digest handset inventory in the market, the sources said, and MediaTek's January sales are expected to have a slight growth from December because of better-than-expected demand in emerging markets.

Although orders for optical storage and consumer electronics products remain weak, MediaTek may still see NT$16-17 billion (US$475.66-505.39 million) sales this quarter, supported by handset chip products, indicated the sources.

In addition to China, the handset markets in South East Asia, South America and India are also performing well, said the sources.

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