China touch panel makers have recently taken measures to adjust production capacity in order to meet increased demand for the third quarter of 2014. In doing so, the makers have faced production issues, leading to a downturn in shipments. As a result vendors have decided to allocate their orders to Taiwan makers.

The China makers reportedly saw an influx of orders from vendors at similar times, prompting the makers to adjust their capacities in order to take on the large amount. The makers faced production and technology issues during the process, causing the vendors to switch their orders to Taiwan makers in order to maintain their product launch schedules.

The vendors include Asustek Computer which has allocated increased orders for handset and tablet touch panels to GIS and J Touch, the sources indicated.

The shifts are good news for Taiwan touch panel makers who have faced increasing competition from China in recent years largely in terms of pricing, the sources said, adding that Taiwan makers are now also more focused on production of embedded touch products in order to help vendors reduce costs.

Expanding embedded touch solutions is an increasing focus for Taiwan panel makers, which the sources said is expected to decelerate demand from vendors if touchscreen controller IC makers can also improve their embedded solution development as well as increase production yields.