In response to consumers’ growing emphasis on camera performance as a major selling point of smartphones, smartphone brands have successively released multi-camera handsets to target this rising demand and seize market shares, in turn driving up the annual shipment volume of smartphone camera modules, according to TrendForce’s latest investigations. Case in point, despite the COVID-19 pandemic’s impact on the smartphone market in 2020, total smartphone camera module shipment still underwent a 3% growth YoY due to the increasing number of camera modules featured per handset as a result of smartphone brands’ competition over camera hardware. Given that the upward trajectory of smartphone camera module shipment will likely persist this year, TrendForce therefore forecasts an annual shipment volume of 5.07 billion units for 2021, an 11% growth YoY.

In addition to increasing the number of camera modules per handset, smartphone brands have also been raising the specifications of their smartphone cameras. First, with regards to the primary camera, certain Android phones will feature up to 64MP camera modules, which will surpass a 20% penetration rate in 2021 (making this particular pixel count spec the fastest-growing among all primary camera specifications), whereas the latest iPhones will likely continue to feature a 12MP primary camera, since Apple is mainly focused on the overall image quality of photos as opposed to megapixel count. Second, with regards to CMOS image sensors, certain smartphone brands, such as Apple, Huawei, and Xiaomi, are expected to increase their smartphone cameras’ sensor sizes to one inch in order to improve these cameras’ performances in low-light or night settings.

Third, with regards to ultrawide cameras, Apple will look to strengthen the autofocus performance of its flagship iPhone models by equipping the iPhone 13 Pro and iPhone 13 Pro Max with VCMs (voice coil motors), which are devices that drive autofocus systems. On the other hand, Huawei and OPPO will incorporate FreeForm Lens technology to address the distortion effect commonly found towards the edges of photos taken with ultrawide cameras.

Finally, with regards to periscope cameras, their widespread adoption by Android smartphone brands in 2020 resulted in a massive 429% growth YoY. Compared to the telephoto cameras found in iPhones, which offer 2.5x optical zoom, periscope cameras are capable of 5x optical zoom at the bare minimum, which delivers much higher image clarity in long-range photography situations. However, the forecasted decline in smartphone shipment of Huawei and Honor, which are the most aggressive in the industry in terms of periscope camera adoption, will in turn negatively affect total periscope camera module shipment for 2021 as well. TrendForce believes that a return to massive growth will not take place unless periscope camera modules capable of continuous autofocus are successfully mass produced, and smartphone brands are willing to adopt such modules for their handsets.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

TrendForce’s investigations finds that LG manufactured merely 30.6 million smartphones last year, which represented a 2.4% market share. The Korean company took ninth place in the global ranking of smartphone brands by production volume in 2020. At the start of this year, LG began to consider either selling or shuttering its mobile phone unit.

Around that same time, it also suspended the R&D of new smartphone models. On April 5, LG announced the decision to fold up the mobile phone unit as it was ultimately unable to offset consecutive years of financial losses it suffered in the smartphone market. Based on the company’s current plan, the mobile phone unit will wind down its operation by the end of July, while its smartphone manufacturing operations will cease by the end of 2Q21.

TrendForce therefore expects LG to occupy a lower than 1% share in the smartphone market this year. Incidentally, the conditions for survival for smartphone brands have further deteriorated on account of the increasingly fierce market competition as well as the recent and continuing hike in component prices. Taken altogether, these developments will reinforce the trend of the dominant brands having more and more market share in the future at the expense of the smaller brands.

Regarding LG’s performance in the smartphone market during the recent years, the company spared no effort in high-end R&D, with such results as the LG Wing with a rotating screen and the LG Rollable, which, as the name suggests, features a side-rolling display. The latter model remained a concept and did not enter mass production.

Despite its efforts, LG however continued to lag behind in sales when compared with the other major brands, such as Samsung and Apple. LG had a relatively weak position in the high-end segment of the smartphone market. As for the mid-range and entry-level segments, LG could not match Chinese brands in terms of pricing. To optimize its cost structure, LG expanded the share of device production going to ODMs. Nevertheless, this action was too late to turn things around.

Samsung, Lenovo, and Xiaomi are likely to benefit from LG’s exit from the North and Latin American markets

LG’s smartphone business has become unprofitable since 2Q15; and its financial losses were further exacerbated after it made a gradual exit from the Chinese market in 2016. As of 4Q20, LG’s smartphone business suffered 23 consecutive quarters of financial losses, which totaled about 5 trillion KRW. Despite LG’s limited market share, however, its exit from the various regional smartphone markets will still benefit its competitors in those markets, in particular, the mid-range segment in North America and Latin America.

With regards to North America, LG’s market share there will be split among its Android-based competitors, including Samsung, Lenovo (Motorola), and other in-house, private brands owned by domestic telecom operators. With regards to Latin America, on the other hand, LG’s exit will more noticeably benefit Lenovo (Motorola) and Xiaomi.

Looking ahead to the rest of 2021, as vaccinations begin to take place around the world, TrendForce expects the smartphone industry, which fulfills a basic living necessity, to make a gradual recovery as well. Thanks to the general public’s cyclical replacement demand, as well as growing demand from emerging markets, total smartphone production remains unaffected by LG’s exit. As a result, TrendForce maintains its smartphone production forecast of 1.36 billion units for 2021, a 9% increase YoY.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

At the moment, the DRAM market has formally entered a new cycle of rising prices, and 2Q21 will see larger QoQ price increases compared with 1Q21, according to TrendForce’s latest investigations. Looking ahead to 2Q21, shipments of various end products are expected to remain fairly strong. At the same time, clients in the data center segment will resume large-scale procurement. Hence, DRAM buyers across different application segments will be under pressure to stockpile. After experiencing QoQ increases of 3-8% for 1Q21, the average contract prices of different kinds of DRAM products are forecasted to rise more significantly by 13-18% QoQ for 2Q21.

PC DRAM contract prices are projected to rise by 13-18% QoQ due to urgent demand from notebook manufacturers driven by bullish notebook market

Notebook computer production on the whole will maintain a fairly healthy momentum in 2Q21. The demand for PC DRAM products therefore continues to grow as PC OEMs have been raising their annual production targets. Since buyers of PC DRAM products are now carrying a relatively low level of inventory (i.e., around 4-5 weeks) and anticipating that DRAM prices will keep rising in the foreseeable future, they have been further ramping up their DRAM procurement activities. With regards to supply, the three dominant DRAM suppliers retain a conservative approach for raising bit output. The production capacity share of PC DRAM could experience a squeeze in the future because of robust demand in other application segments. For instance, some smartphone brands continue to vigorously stock up on memory components. Also, the demand for server DRAM products are expected to warm up rapidly in 2Q21. All in all, contract prices of PC DRAM products will register significant QoQ increases of 13-18% for 2Q21.

Server DRAM prices are projected to rise by nearly 20% QoQ due to cyclical upturn in server shipments

With regards to the demand for server DRAM, the second quarter is traditionally the peak season for server shipments while also being a fairly busy period within the year for the procurement of other kinds of DRAM products. Hence, the situation of different sources of demand competing for DRAM suppliers’ production capacity becomes more evident in this period. TrendForce expects server DRAM buyers to be more aggressive in inventory building during 2Q21 and begin to raise the procurement quantity on a monthly basis. This, in turn, will sustain the uptrend in server DRAM prices. With regards to supply, the server DRAM production capacities of the three dominant suppliers will still not return to the level that existed in the middle of 2020, although these suppliers will slightly increase the share of server DRAM in their overall DRAM production capacities in 2Q21. In addition to the peak-season effect, the COVID-19 pandemic continues to influence server manufacturers as well. Server manufacturers have intentionally extended their component inventories by several more weeks because of the pandemic-induced uncertainties. TrendForce is therefore not discounting the possibility of server DRAM contract prices registering a QoQ increase as large as around 20% for 2Q21.

Mobile DRAM contract prices are projected to remain bullish due to smartphone brands’ expanded procurement activities in advance of market risks

With regards to mobile DRAM demand, smartphone brands will not relax their inventory-building efforts in 2Q21 as the production capacity crunch in the foundry market has made them more vigilant in maintaining a stable component supply. The quarterly total smartphone production volume for 2Q21 is forecasted to exceed 300 million units. Although the three dominant DRAM suppliers have yet to adjust their product mixes for 2Q21, they will probably have to later on because the ASPs of server DRAM and other kinds of DRAM products are rising faster than the ASP of mobile DRAM. Hence, the production capacity share of mobile DRAM could be scaled back so that the production capacity share of server DRAM could grow. Additionally, the behavior of mobile DRAM buyers has been influenced by the cyclical upturn in prices and the anxiety over a tightening of supply in the future. They will continue to procure in large quantities so as to avoid the risks of a supply shortage and larger price hikes. This means that mobile DRAM prices will be on the uptrend as buyers stock up in advance.

Graphics DRAM contract prices are projected to rise by 10-15% QoQ due to high demand for graphics cards from cryptocurrency miners

With regards to demand, the three growth pillars of the graphics DRAM market are graphics cards, game consoles, and cryptocurrencies. At the same time, the mining of various cryptocurrencies has become a lucrative activity. Besides graphics cards that represent the more conventional mining technologies, miners are buying notebooks for this purpose as well. Sensing opportunities, Nvidia has launched CMP (cryptocurrency mining processor) cards and thereby taken up more of DRAM suppliers’ resources. This, in turn, has led to small- and medium-sized OEMs and ODMs experiencing a widening supply gap for graphics DRAM. With regards to supply, the three dominant DRAM suppliers have all reassigned their production capacity for graphics DRAM from GDDR5 to GDDR6, resulting in an increasingly lopsided discrepancy between the two products’ bit supplies, so there is no effective resolution to the ongoing shortage of GDDR5 products. As for GDDR6, demand remains strong as cryptocurrency mining is keeping the demand for graphics cards at a high level, although Nvidia is hogging much of the existing production capacity for graphics DRAM. Looking ahead to 2Q21, the supply situation will still be very strained unless the values of the mainstream cryptocurrencies undergo a drastic change. TrendForce forecasts that contract prices of graphics DRAM will rise by about 10-15% QoQ during this period.

Consumer DRAM contract prices are projected to rise by up to 20% QoQ due to intensifying shortage

With regards to consumer DRAM demand, the demand for TVs, set-top boxes, and networking devices remains strong due to the prevailing stay-at-home economy. Additionally, the build-out of 5G infrastructure and the rapid migration to Wi-Fi 6 contribute to the brisk demand for low-density consumer DRAM products. The supply gap in consumer DRAM market is already significant at this moment and will likely widen in 2Q21. With regards to supply, the overall production capacity for DDR3 products is gradually shrinking. The three dominant suppliers are migrating to the more advanced processes such as the 1Z-nm and 1-alpha nm while reassigning the wafer production capacity of the older processes such as the 20nm and 25nm to CMOS image sensors. Also, Taiwan-based suppliers have allocated some wafer production capacity to products with higher margins (e.g., logic ICs and Flash memory). As a result, the consumer DRAM market is in a rare situation of experiencing a supply shortage and a demand rebound at the same time. There is a strong likelihood that prices of some consumer DRAM chips will register a QoQ increase of almost 20% for 2Q21 contracts, and there is room for further hikes following quarterly contract negotiations.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

Among the various display technologies used for smartphones in 2021, AMOLED models are expected to account for a 39% penetration, thanks to smartphone brands’ increasing adoption of this technology, according to TrendForce’s latest investigations. In the entry-level and mid-range segments, the smartphone demand for a-Si LCD models remains strong, although this technology’s penetration rate is expected to undergo a slight decrease to 28%. On the other hand, LTPS LCD models are continuing to lose market share to competing technologies, resulting in a 33% penetration rate, while LTPS HD LCD models will occupy a growing share of this segment.

TrendForce indicates that smartphone brands’ procurement activities for components in 2H20 will persist throughout 2021 for two reasons: First, the industry on the whole expects demand for smartphones to ramp up considerably this year. Second, production capacities across the entire semiconductor supply chain have been tight, with some segments even showing severe shortage, thus prompting downstream clients such as smartphone brands to stock up on certain components in order to mitigate the potential risk associated with component shortages.

With regards to the development of smartphone display technologies, panel suppliers have been regaining client orders for rigid AMOLED panels through aggressive pricing since 2H20. Owing to increased adoption by smartphone brands this year, rigid AMOLED models are expected to maintain a strong market presence in the mid-range and premium mid-range segments. Flexible AMOLED models, on the other hand, will likely dominate the high-end and flagship segments. Going forward, AMOLED models will gradually cannibalize the market shares of LTPS LCD models in the mid-range and premium mid-range segments, in turn forcing LTPS LCD models into a lower price segment.

Market demand for entry-level and mid-range smartphones, especially for HD models, has remained strong since 2020, due to the impact of the COVID-19 pandemic. However, the supply of key components in these smartphones (including a-Si LCD panels as well as DDI and TDDI ICs) has been in shortage in light of the foundry industry’s tight production capacities. As prices of a-Si LCD panels and ICs spiked, panel suppliers saw this upturn as the perfect opportunity to fulfill the existing demand for a-Si products with LTPS products and in turn expend their production capacity for LTPD LCD panels. Smartphone brands began adopting a-Si HD and LTPS HD LCD panels interchangeably in an increasing number of models, thus giving TDDI ICs flexibility to be used in a greater number of compatible handsets.

At the moment, IC supply remains the greatest bottleneck in the overall smartphone supply chain; case in point, TDDI supply is tight to the point of shortage. TrendForce believes that two key factors will exert significant influence over the smartphone panel industry going forward: First, Chinese IC design companies are likely to obtain wafer input priorities in Chinese foundries thanks to government policies. These IC design companies may potentially experience considerable growth as a result and disrupt the predominant oligopoly of Taiwanese IC design companies in the smartphone panel market. Second, once the ongoing capacity expansion effort of Chinese foundries concludes, their additional production capacities will alleviate the current shortage of IC supplies, with IC prices subsequently entering a downward trajectory. As a result of lowered IC prices, the relationship between LTPS HD panels and a-Si HD panels will likely shift from complementary to competitive, with both product categories struggling for dominance in the HD smartphone model segment.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

The Line S2 fab of Samsung in Austin, Texas sustained a power interruption, which has forced it to suspend operation since mid-February, under the impact from the winter storm. TrendForce’s latest investigations indicate that the capacity utilization rate for the entire fab is not expected to climb back to over 90% until the end of March. In particular, Samsung manufactures several products that are highly important for the production of smartphones, including the Qualcomm 5G RFIC, Samsung LSI OLED DDIC, and Samsung LSI CIS Logic IC. Supply-wise, the first two products sustained the brunt of the winter storm’s impact, and global smartphone production for 2Q21 is therefore expected to drop by about 5% as a result.

According to TrendForce’s investigations, Samsung was able to prepare for the power interruption ahead of time as the company had been forewarned by the local utility. Hence, the loss of WIP (work in progress) wafers caused by the incident was minimal. However, the delay in the resumption of full operation at the plant is expected to last more than two weeks, during which the fab will suspend its wafer input. The incident on the whole will have a definite impact on the global foundry industry that is already experiencing a serious capacity crunch. In terms of wafer input, the Qualcomm 5G RFIC, Samsung LSI OLED DDIC, and Samsung LSI CIS Logic IC account for 30%, 20%, and 15% of the Line S2’s monthly production capacity, respectively.

Of the three aforementioned products, the Qualcomm RFIC is primarily supplied to smartphone brands to be used in 5G handsets. This product is delivered to clients as part of either AP bundles or 5G modems. The winter storm’s impact on the production of the Qualcomm RFIC is expected to take place in 2Q21, resulting in a 30% decrease in 5G smartphone production for the quarter. However, TrendForce expects this incident to impair the 2Q21 production of all smartphones by only about 5%, given smartphone brands’ existing inventory of 5G AP bundles and 5G modems, in addition to the fact that smartphone brands are likely to keep up their quarterly smartphone production by increasing the production of 4G handsets to make up for the shortfall in 5G handsets. Furthermore, TrendForce expects the Line S2 fab to prioritize resuming the production of RF products ahead of other products, in turn further mitigating the winter storm’s impact on global smartphone production.

On the other hand, the Samsung LSI OLED DDIC is primarily used in Apple’s iPhone 12 series. The winter storm’s impact on these DDICs will similarly take place by the end of 2Q21. Even so, Apple likely possesses sufficient DDIC inventory, at least in the short term, since the period of peak DDIC demand for the company’s existing smartphone models has already passed. Moreover, the iPhone 12 mini may reach EOL earlier than expected due to disappointing sales. Should Apple decide to cut iPhone 12 mini production, the company will be able to further minimize the impact of OLED DDIC undersupply. Finally, as sales of the iPhone 11 (which is equipped with an LCD, instead of OLED, panel and therefore does not require OLED DDIC) have been resurging recently, Apple may increase the share of iPhone 11 in its total smartphone production in order to keep up its quarterly production volume. In light of these factors, TrendForce believes that the production volume of iPhones in 2Q21 will suffer only limited impact from OLED DDIC supply disruptions.

On the whole, although the production of 5G smartphones will face a relatively considerable challenge in 2Q21, smartphone brands will be able to keep up their quarterly production volume by raising the production share of 4G smartphones instead. TrendForce thus projects the winter storm to impair smartphone production for 2Q21 by no more than 5%, while maintaining the previous forecast of 1.36 billion units produced for 2021. However, TrendForce also does not rule out the possibility that the winter storm will lower the penetration rate of 5G smartphones in 2021 from 38%, as previously forecasted, to 36.5%.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com