According to TrendForce research, the global high-performance computing market reached approximately US$36.8 billion in 2021, growing 7.1% compared to 2020. The United States is still the largest market for high-performance computing in the world with an approximate 48% share, followed by China and Europe, with a combined share of approximately 35%. Segregated into application markets, high-performance computing is most widely used in scientific research, national defense/government affairs, and commercial applications, with market shares of 15%, 25%, and 50%, respectively. In terms of product type, software (including services) and hardware account for 58% and 42% of the market, respectively.

Since high-performance computing can support data analysis, machine learning (ML), network security, scientific research, etc., it plays a key role in military fields such as nuclear warhead design and missile explosion simulations. Therefore, there are relatively few players occupying key positions in the value chain. Primary suppliers are Fujitsu, HPE, Lenovo, and IBM. These four manufacturers account for a market share of approximately 73.5% globally.

In addition, the continuous development of smart cities, smart transportation, self-driving cars, the metaverse, and space exploration and travel programs launched by Space X, Blue Origin, and Virgin Galactic will increase the demand for high-performance computing focused on R&D and testing along the two major axes of simulation and big data processing and analysis. The global high-performance computing market is expected to reach US$39.7 billion in 2022, with a growth rate of 7.3%. The CAGR (Compound Annual Growth Rate) of the global high-performance computing market from 2022 to 2027 will be 7.4%.

In view of this, the global high-performance computing market is growing steadily but not by much. The reason is that many of the aforementioned commercial application terminals are still in the growth stage, so high-performance computing technologies and solutions adopted by cloud service providers are limited to local deployment This enables HPC servers to scale on-premises or in the cloud and provides dedicated storage systems and software to drive innovation, thereby accelerating the development of hybrid HPC solutions.

In terms of end-use, the high-performance computing market is segmented into BFSI (Banking, Financial Services and Insurance), manufacturing, healthcare, retail, transportation, gaming, entertainment media, education & research, and government & defense. High-performance computing’s highest revenue share was derived from the government and defense market in 2021, primarily due to related agencies actively adopting cutting-edge and advanced IT solutions to improve computing efficiency. At present, government agencies in the United States, China, Japan, South Korea, as well as European countries have successively adopted high-performance computing systems to support digitization projects and contribute to economic development. Therefore, in 2021, the global scale of the on-premise high-performance computing server market was US$14.8 billion, of which Supercomputer, Divisional, Departmental, and Workgroup accounted for 46.6%, 18.9%, 25%, and 9.5% of the market, respectively. The global on-premise high-performance computing server market in 2022 is expected to reach US$16.7 billion with Supercomputer and Divisional growing by 11.5% and 15.2% compared with 2021.

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According to TrendForce investigations, global TV shipments will reach 47.26 million units in 1Q22, down 20% QoQ. Driven primarily by the Russian-Ukrainian war, prices of raw materials such as crude oil and natural gas have risen, while the recent breakout of the Omicron strain of the pandemic in China has incited repeated no warning attempts at enacting dynamic zero-COVID, which has hindered the flow of logistics, hiked freight rates, and taken as a whole, exacerbated existing global inflation woes. Consumers with limited disposable income have started to cut back on non-essentials with TV sales bearing the brunt. Looking at the three major TV sales regions of North America, Europe, and China in 1Q22, high inflation in Europe and the United States has led to a sharp 20% drop in demand. In China, due the festering pandemic, numerous cities have been locked down, while unemployment is spiking, logistics are impeded, and prices soar. TV product sales are at a complete disadvantage and the demand in 1Q22 dropped by 15~20%.

TrendForce further points out, originally Chinese brands banked on low 2Q22 panel prices and not being required to shoulder expensive shipping costs in the domestic market, expecting that the 618 anniversary promotional period would inject fresh enthusiasm into the market and boost annual shipments. However, now that China’s TV sales are disrupted by the pandemic, any hope riding on TV brands’ only large-scale promotional event in the first half of the year may have been dashed. In addition, Q3 was when brands stocked up in previous years for Black Friday and Christmas season promotions in Europe and the United States. However, this year’s FIFA World Cup was postponed to November, resulting in overlapping promotional schedules, which may curb sales. Ocean freight remains expensive this year, with additional costs increasing with greater item size, which is not conducive to the rollout of branded manufacturers’ large-scale promotional activities in 2H22. Therefore, TrendForce estimates that this year’s TV shipments will drop further to 212 million units, for an annual growth of only 1%, and there exists additional potential for downward risk.

Demand in Europe and US misses estimates, international brands drop orders, and 2Q22 decline in TV panel prices expands further

The top two leading TV brands, Samsung and LG Electronics, are mainly sold in North America and Europe. Therefore, since TV sales in Europe and the United States declined by 20% in 1Q22, this had the greatest impact on these two leading brands. Samsung Electronics shipped 10.9 million TVs in 1Q22, down 3.1% QoQ while LG Electronics shipped 6.53 million TVs in 1Q22, down 11.8% QoQ and down 6.4% YoY. Affected by weak terminal demand, the two major brands revised their panel purchase orders in late March. Samsung’s purchasing volume in 1Q22 was revised down 7.5% and fell by 9.5% in 2Q22. LG Electronics primarily focused on reducing purchase orders in 2Q22 and purchasing volume decline is expected to exceed 20%.

TrendForce specifically states, major international manufacturers have recently revised their orders in succession. Although Chinese brands have yet to see a significant reduction in orders, if 618 promotions are disappointing, it cannot be ruled out panel procurements will begin to fall in mid-to-late Q2. Although branded manufacturers significantly revised TV panel orders downward in 2Q22, panel manufacturers have not seen a significant reduction in utilization rate, which will depress the price of panels below 55 inches (inclusive) in a sustained freefall while the prices of large size panels above 65 inches (inclusive) will continue to deteriorate.

Samsung Electronics delays launch of WOLEDs, styming 2022 OLED TV shipment performance

This year, the supply of OLED TV panels has benefited from LG Display’s expanded production capacity of 8.5-generation OLED TVs in Guangzhou. As supply increased, LG Display also improved product specifications and prices, but this led to Samsung Electronics delaying the verification and launch schedule of white OLED products. Not only has Samsung Electronics’ 2022 market share of OLED TVs shrunk from 15% at the beginning of the year to 6.4%, but global OLED TV shipments will be revised down to 7.79 million units this year, with an annual growth rate of 17%.

According to TrendForce, Taiwan is crucial to the global semiconductor supply chain, accounting for a 26% market share of semiconductor revenue in 2021, ranking second in the world. Its IC design and packaging & testing industries also account for a 27% and 20% global market share, ranking second and first in the world, respectively. Firmly in the pole position, Taiwan accounts for 64% of the foundry market. In addition to TSMC possessing the most advanced process technology at this stage, foundries including UMC, Vanguard, and PSMC also have their own process advantages. Under the looming shadow of chip shortages caused by the pandemic and geopolitical turmoil in the past two years, various governments have quickly awakened to the fact that localization of chip manufacturing is necessary to avoid being cut off from chip acquisition due to logistics difficulties or cross-border shipment bans. Taiwanese companies have ridden this wave to become partners that governments around the world are eager to invite to set up factories in various locales.

Currently, 8-inch and 12-inch foundries are dominated by 24 fabs in Taiwan, followed by China, South Korea, and the United States. Looking at new factories plans post 2021, Taiwan still accounts for the largest number of new fabs, including six new plants in progress, followed in activity by China and the United States, with plans for four and three new fabs, respectively. Due to the advantages and uniqueness of Taiwanese fabs in terms of advanced processes and certain special processes, they accepted invitations to set up plants in various countries, unlike non-Taiwanese foundries who largely still build fabs locally. Therefore, Taiwanese manufacturers have successively announced factory expansions at locations including the United States, China, Japan, and Singapore in addition to Taiwan in consideration of local client needs and technical cooperation.

The focus of Taiwan’s key technologies and production expansion remains in Taiwan, accounting for 44% of global wafer production capacity by 2025

In 2022, Taiwan will account for approximately 48% of global 12-inch equivalent wafer foundry production capacity. Only looking at 12-inch wafer production capacity with more than 50% market share, the market share of advanced processes below 16nm (inclusive) will be as high as 61%. However, as Taiwanese manufacturers expand their production globally, TrendForce estimates that the market share held by Taiwan’s local foundry capacity will drop slightly to 44% in 2025, of which the market share of 12-inch wafer capacity will fall to 47% and advanced manufacturing processes to approximately 58%. However, Taiwanese foundries’ recent production expansion plans remain focused on Taiwan including TSMC’s most advanced N3 and N2 nodes, while companies such as UMC, Vanguard, and PSMC retain several new factory projects in Hsinchu, Miaoli, and Tainan.

TrendForce believes, since Taiwanese foundries have announced plans to build fabs in China, the United States, Japan, and Singapore, and foundries in numerous countries are also actively expanding production, Taiwan’s market share of foundry capacity will drop slightly in 2025. However, semiconductor enclaves do not come together quickly. The integrity of a supply chain relies on the synergy among upstream (raw materials, equipment, and wafers), midstream (IP design services, IC design, manufacturing, and packaging and testing), and downstream (brands and distributors) sectors. Taiwan has advantages in talent, geographical convenience and industrial enclaves. Therefore, Taiwanese foundries still tend to focus on Taiwan for R&D and production expansion. Looking at the existing blueprint for production expansion, Taiwan will still control 44% of the world’s foundry capacity by 2025 and as much as 58% of the world’s capacity for advanced processes, continuing its dominance of the global semiconductor industry.

Although the global smartphone market is becoming increasingly saturated, it is still worth looking forward to demand in emerging markets such as Southeast Asia and Africa when caught in an environment with limited momentum. . Due to the recent expansion of infrastructure construction in Africa, the regional smartphone market has the opportunity to replicate the prior development path of Thailand, Vietnam, and Indonesia. TrendForce forecasts total smartphone shipments in Africa to reach approximately 107 million units in 2022. Sub-Saharan Africa, which accounts for 78% of Africa’s total population, holds the greatest potential and countries such as Nigeria, Ghana, Senegal, and Tanzania are worthy of attention.

Taking the Sahara Desert as a natural barrier, North Africa cleaves closer to Europe and the Middle East, modernizing earlier, and possessing higher GDP per capita and relatively greater spending power. Looking at Egypt, its mainstream smartphone brands in 2021 were Samsung, OPPO, and Xiaomi. As for Africa south of the Sahara, taking Nigeria as an example, mainstream brands are TECNO, Infinix, and Itel, which is very different from the Egyptian market. TECNO, Infinix, and Itel are owned by Transsion Holdings of China and, in terms of the overall African smartphone market, Transsion Holdings is already dominant. These three brands captured an estimated combined market share of approximately 52% in 2021, eclipsing Samsung’s 15%.

TrendForce believes that mainstream mobile phone brands in Africa are very different from markets in Europe, North America, and East Asia and are mainly influenced by factors such as local spending power, communication services, and user needs, while mobile phone pricing is undoubtedly the decisive factor. For example, approximately 60% of smartphones sold in Egypt are priced between $100 and $200. While in sub-Saharan Africa, excluding a few countries with high GDP per capita such as Gabon and South Africa, most smartphones are sold at below US$100 in the market. However, from the perspective of mainstream global smartphone brands, the price of low-end smartphones is still higher than US$160 which remains quite unaffordable for the majority of local consumers. This pricing gap gives TECNO, Infinix, and Itel more room to operate.

In addition, the reason Transsion Holdings’ brands can dominate the African smartphone market includes many localized marketing strategies in addition to price factors. For example, cleaving close to local consumption habits, setting up physical sales locations, launching models that support 4 sim cards to meet the needs of users with multiple phone numbers, or installing large-capacity batteries in low-end mobile phones to reduce the inconvenience of frequent searches for charging stations, all of which help to enhance the competitive strength of the Transsion brand. Transsion Holdings is expected to continue leading the African market from 2022 to 2025.

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As a consequence of rising power battery raw material prices, a number of global new energy vehicle (NEV) brands including Tesla, BYD, NIO, Li Auto, and Volkswagen, have successively raised the sales prices of electric vehicles (EV) in 1Q22. TrendForce believes that power batteries are the core component that account for the greatest portion of an EV’s overall cost and reducing the cost of power batteries will be an important strategy for companies to remain competitive in the future. As technology continues to innovate, lithium iron phosphate batteries are expected to account for more than 60% of installed capacity in the global power battery market by 2024.

TrendForce indicates, from the perspective of the world’s largest EV market, China, the power battery market reversed in 2021 and lithium iron phosphate batteries officially surpassed ternary batteries with 52% of installed capacity. Lithium iron phosphate installed capacity continued to grow in 1Q22, rising to 58%, and demonstrating a growth rate far beyond that of ternary batteries. However, from the perspective of the global EV market, thanks to the increase in the penetration rate of NEVs in Europe and the United States, ternary batteries still accounted for a market share of more than 60% in 2021, far exceeding that of lithium iron phosphate batteries, which captured a market share of approximately 32~ 36%.

Although the current gap between these two materials remains substantial, according to production capacity planning of global new energy battery cathode material manufacturers in the past two years, the scale and speed of lithium iron phosphate materials expansion will far exceed that of ternary materials. According to TrendForce investigations, planned expansion projects announced by global cathode material manufacturers are currently concentrated in China and South Korea, with a nominal total planned production capacity of over 11 million tons, of which planned production capacity of lithium iron phosphate cathodes accounts for approximately 64%. However, since planned production capacity exceeds market demand, there will be a certain shortfall between the industry’s total planned production capacity and actual future production capacity. It remains to be seen to what level actual effective production capacity can rise in the future.

It is worth noting, as the price of core battery raw materials such as lithium, cobalt, and nickel has moved up clearly since 2H21 and the global power battery supply chain is plagued by uncertainty including the Russian-Ukrainian war and the global pandemic, there will be a short-term disparity between the growth rate of supply and demand and companies will focus more on reducing the cost of battery materials and supply chain security, two major issues related to future competitiveness. As a result of this trend, TrendForce expects the cost-effective advantage of lithium iron phosphate batteries to become more prominent and this type of battery has an opportunity to become the mainstream of the terminal market in the next 2-3 years. The global installed capacity ratio of lithium iron phosphate batteries to ternary batteries will also move from 3:7 to 6:4 in 2024