News
Non-Apple IC manufacturers are reporting positive business performance this quarter. Chinese brands are experiencing a revival driven by the release of new Huawei smartphones, and a resolution in inventory clearance in emerging markets. This has led to an increase in orders. Additionally, Samsung’s success in foldable phones is contributing to the upsurge. This overall trend is benefiting companies like MediaTek and Novatek in the smartphone-related IC manufacturing sector.
As reported by CTEE, China holds about 25% of the global smartphone market, with industry analysts predicting sales of 260 million units in China for 2023. Huawei’s re-entry into the smartphone market will significantly impact the smartphone SoC market share in 2024. This development will challenge Apple’s market share in China, and Huawei’s upcoming Nova mid-range smartphones will also affect brands like Honor, OPPO, Vivo, Xiaomi, and others, as they vie for market share.
Key drivers of the smartphone industry’s recovery
According to Economic Daily News, many Chinese smartphone brands are optimistic about the local market’s improvement following the launch of Huawei’s new smartphones. Beyond flagship models like the Mate 60, mid-range series like Nova are also showing increased activity. Leading non-Apple smartphone manufacturers are gearing up for a surge in demand and are actively stocking up on top-tier flagship chips, thus stimulating the supply chain’s demand for additional orders.
At the same time, Taiwanese manufacturers mention that Chinese smartphone brands that primarily target emerging markets have already digested their accumulated inventory and are now starting to replenish their stocks. Some smartphone-related chip manufacturers have also pointed out that Samsung and other Korean smartphone giants are enjoying good sales of foldable phones and have recently conveyed messages about increasing orders.
TrendForce notes that the current revival on demand side in the global smartphone market is primarily driven by inventory restocking. The potential for sustained orders remains uncertain due to the prevailing economic challenges.
(Image: MediaTek)
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Press Releases
According to IJIWEI’s report, industry insiders reveal that Huawei has set a goal of shipping 100 million smartphones next year. This target represents a 40% increase over earlier predictions, as various market research firms had previously estimated Huawei’s smartphone shipments for the next year to be around 70 million units.
Huawei’s aggressive sales plan for the upcoming year is propelled by the favorable reception of its recently launched flagship smartphone series, the Mate 60. By the end of this year, Huawei aims to have shipped approximately 20 million units of the Mate 60 series, contributing to the projected annual smartphone shipments ranging between 40 million and 50 million units. This surpasses the previous year’s shipments of 30 million units by 30 to 70%.
With the growing shipment volumes, the supply of Huawei Mate 60 series smartphones featuring organic light-emitting diode (OLED) panels has also seen an increase recently, with suppliers ramping up their production rates.
The Huawei Mate 60 series has become a much-anticipated success in the consumer electronics market. During the Huawei Autumn Full-Scene New Product Launch event, Huawei’s Terminal BG CEO and Chairman of the Intelligent Automotive Solution BU, Richard Yu, expressed his delight with the positive response to the “Pioneer Program” products.
Huawei is currently working around the clock to meet the surging demand for its products. The “Pioneer Program” includes the Mate 60 Pro, Mate 60 Pro+, and the foldable Mate X5.
Several supply chain sources and analysts have indicated that since earlier this year, Huawei has been steadily increasing its stock of components such as lenses, cameras, printed circuit boards, and various other parts to meet its shipment targets. Huawei has also requested that its sole 4G mobile chip supplier in the U.S., Qualcomm, deliver the full-year orders before June.
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Press Releases
With the approach to the end of 2023, TrendForce revealed the tech trends in every sector, apparently, AI continues as the main focus to decide the direction of how the tech supply chain will be in the next few years, here are the seeings:
CSPs increase AI investment, driving a 38% growth in AI server shipments by 2024
HBM3e set to drive an annual increase of 172% in HBM revenue
Rising demand for advanced packaging in 2024, the emergence of 3D IC technology
NTN is set to begin with small-scale commercial tests, broader applications of this technology are on the way in 2024
6G communication to begin in 2024, with satellite communication taking center stage
Innovative entrants drive cost optimization for Micro LED technology in 2024
Intensifying competition in AR/VR micro-display technologies
Advancements in material and component technologies are propelling the commercialization of gallium oxide
Solid-state batteries poised to reshape the EV battery landscape over the next decade
BEVs in 2024 rely on power conversion efficiency, driving range, and charging efficiency
Green solutions with AI simulations emerging as a linchpin for renewable energy and decarbonized manufacturing
OLED’s expansion will across various applications driven by the innovation of foldable phones
News
Source to China Times, on the 25th of this month, Huawei introduced its top-tier flagship smartphone, the Mate 60 RS. The entire supply chain is buzzing with anticipation. However, major chipset manufacturers, MediaTek and Qualcomm, both stand ready for what lies ahead. The reason for their vigilance stems from their previous share of the pie, which was snatched away by Huawei. Now, there’s concern that those gains may slowly be taken back.
For MediaTek, although Huawei’s new phone is positioned as a high-end model, it doesn’t pose a direct threat to MediaTek’s focus on mid-range and low-end 5G chips. However, industry insiders believe that Huawei might not rule out the possibility of launching mid-range and low-end 5G phone chips in the future, deepening the HarmonyOS, which could further squeeze MediaTek’s market share.
Huawei has traditionally used its in-house HiSilicon-designed chips for its smartphones. However, due to US sanctions, Huawei’s market share plummeted, allowing other Chinese smartphone competitors to seize opportunities. MediaTek and Qualcomm benefited from this shift in orders.
Recently, Huawei has made a strong comeback. Following the low-key release of the Mate 60 Pro, it has now unveiled the flagship RS model. After 3 years of intensive efforts, Huawei has achieved comprehensive self-reliance in operating systems, software, databases, and other foundational software. It has also completed the development of domestic alternatives for 13,000 components, investing heavily in the semiconductor supply chain.
The most impacted player in this scenario is Qualcomm, which primarily targets the high-end market. There are even expectations that by 2024, Qualcomm will lose all Huawei smartphone orders. Although MediaTek’s mainstream models have not been directly affected, there’s a possibility that Huawei may strengthen its HarmonyOS ecosystem, gradually penetrating the mid-range and low-end segments. MediaTek needs to remain vigilant. Huawei’s Nova series, for instance, is aimed at mid-range models, and it may not rule out using its in-house Kirin 5G chips to gain a stronger foothold in the market.
The initial stock of the Mate 60 series reached 15 million units, and the shipment target for 2023 has been raised to 20 million units, including foldable phones like the Mate X3 and X5. Supply chain sources suggest that Huawei has internally raised its overall shipment target for 2023 to 40 million units, and the market anticipates even higher volumes of 50 million to 60 million units in 2024.
Industry insiders point out that due to strong demand for Huawei’s products and better-than-expected i15 orders, there are reports of inventory replenishment in the smartphone supply chain. However, in the future, both China and the United States will cultivate their respective supply chains, reducing the win-win situations. For instance, in the RF Front-end segment, Huawei has started to use domestic supplier Maxscend Technologies, which could squeeze market orders for US and Taiwanese suppliers. (Image credit: Huawei)