MediaTek is expected to see its revenues drop 6-11% sequentially in the fourth quarter of 2014 due to declining shipments of 3G smartphone solutions and other ICs for consumer electronics, networking communication and optical storage applications, according to industry sources.

Moreover, the slow sales for MediaTek is likely to continue into the first quarter of 2015, due to a high inventory level of smartphones in China and slowing overseas shipments of handsets by China-based vendors affected by seasonality, the sources added.

Some sources at China-based handset ODMs put the inventories of 3G handsets in China at as high as 200 million units, although sources at MediaTek said that they have no knowledge of such a figure.

Most brand handset vendors in China are still being locked in an inventory adjustment process which began after the October 1 holiday period and therefore are unlikely to resume chipset orders prior to the upcoming Lunar New Year holidays, commented the sources.