Many Taiwan analog IC design houses reported second-quarter gross margins at below 40% – representing declines from the first quarter – including Richtek Technology, Global Mixed-mode Technology (GMT), Advanced Analog Technology (AAT) and Anpec Electronics, due to fierce price competition.

In addition, while Taiwan design houses can compete on price, Taiwan analog IC design houses often use a price cutting strategy to compete with each other, lowering average selling prices (ASPs), and in turn gross margins, even further. The sources suggested that local companies should instead work together to better compete against their first-tier rivals.