Initial sales of new smartphones launched by some vendors in China in the third quarter, such as Xiaomi Technology's Hongmi smartphone, have been brisk, indicating that replacement demand for smartphones in China is still growing, according to market observers.

In order to meet the growing demand, Taiwan-based suppliers of LCD driver ICs, touch controller ICs, ambient light sensors and analog ICs have been gearing up their efforts, including rolling out new solutions to ramp up sales, said the observers.

LCD driver IC vendors Novatek Microelectronics, Orise Technology and Sitronix Technology have been performing well by tying up their shipments with MediaTek's reference designs for smartphones, revealed the sources.

Ambient light sensor supplier Capella Microsystems and Lite-On Semiconductor, as well as touch controller IC vendor Elan Microelectronics all have benefited from the increasing popularity of MediaTek's reference designs, added the sources.

Meanwhile, Realtek Semiconductor has teamed up with China-based Spreadtrum Communications to promote its Wi-Fi chips, while Global Mixed-mode Technology (GMT) is tying up with Qualcomm to ramp up its shipments of analog ICs, indicated the observers.