Sales at IC design house MediaTek are set to register a sequential decrease in November, due to pressure to cut EDGE-chip inventories, as well as tight supplies of panels under 4-inch, according to industry sources.

Sales of EDGE smartphone solutions have fallen substantially, the sources indicated.

Meanwhile, with panel suppliers allocating more capacity to produce 7- and 10-inch products that yield higher gross margins, panels under 4-inch are in tight supply bringing negative impact on MediaTek's performance in November, the sources said.

In response, MediaTek disclosed that there has been rising demand for mid-range and high-end smartphones since China's National Day holidays in early October, but demand for entry-level devices appeared weaker than expected. Entry-level smartphones are those using EDGE chips, which have become a less attractive option compared to more capable 3G smartphones, according to MediaTek.

As a result, sales for November are likely to drop slightly on month, MediaTek said. However, sales will rebound to a sequential growth track in December, thanks to continued-brisk demand for mid-range and high-end smartphones as well as its the launch of quad-core solutions, the firm noted.

MediaTek did not comment on whether small-size panel shortages are affecting company sales.

MediaTek reiterated the sales guidance given previously for the fourth quarter.