MediaTek is likely to revise downward its handset-IC shipment target for 2015 to about 400 million units from 450 million, a 10% cut, according to market sources.

After experiencing a particularly weak first half of 2015, MediaTek will see orders rebound in the third quarter thanks to a pick-up in smartphone demand from China and emerging markets, as well as brand vendors' roll-outs of new products, said the sources. However, unfavorable macroeconomic conditions will cast a shadow on the demand outlook for the fourth quarter.

MediaTek is expected to see orders rise about 20% sequentially in the third quarter, but orders placed thus far for the fourth quarter have turned weak, the sources indicated.

MediaTek president Hsieh Ching-chiang said previously that customer demand started picking up in May and has strengthened since June, and expressed optimism about the company's performance in the third quarter.

Foundry chipmaker TSMC suggested at its recent investors meeting that global smartphone demand has decelerated significantly. Handset companies are struggling with excessive inventories which are unlikely to reduce to an adequate level until the fourth quarter, TSMC said.

MediaTek is scheduled to hold its quarterly investors meeting on July 31 to discuss its performance in the second quarter of 2015, and provide its business outlook for the second half of the year.