As the global economy enters the post-pandemic era, technologies including 5G, WiFi6/6E, and HPC (high-performance computing) have been advancing rapidly, in turn bringing about a fundamental, structural change in the semiconductor industry as well, according to TrendForce’s latest investigations. While the demand for certain devices such as notebook computers and TVs underwent a sharp uptick due to the onset of the stay-at-home economy, this demand will return to pre-pandemic levels once the pandemic has been brought under control as a result of the global vaccination drive.

Nevertheless, the worldwide shift to next-gen telecommunication standards has brought about a replacement demand for telecom and networking devices, and this demand will continue to propel the semiconductor industry, resulting in high capacity utilization rates across the major foundries. As certain foundries continue to expand their production capacities this year, TrendForce expects total foundry revenue to reach a historical high of US$94.6 billion this year, an 11% growth YoY.

TrendForce’s latest analysis also finds that shipments and production volumes of end products will continue to grow in the post-pandemic period. Regarding host computers, the total (or global) shipments of servers and workstations are forecasted to undergo a yearly growth mainly driven by applications that are enabled by 5G and HPC. As for various types of client (or end-user) devices, the annual total production volume of 5G smartphones, in particular, is forecasted to increase by around 113% YoY. The penetration rate of 5G models in the smartphone market is also forecasted to rise to 37% in the same year. Turning to notebook (or laptop) computers, their total shipments in 2021 will register a YoY growth rate of about 15% thanks to the proliferation of the stay-at-home economy.

Finally, the governments of many countries introduced consumption subsidies during the pandemic so as to stimulate the domestic economy. Video streaming services have also grown dramatically with respect to content and demand because of the pandemic. As a result, the TV market is seeing a wave of replacement demand as consumers want to purchase the latest models that offer higher resolutions (e.g., 4K and 8K) and network connectivity (i.e., smart TVs). The total shipments of digital TVs in 2021 are forecasted to undergo a YoY growth rate of around 3%.

The high demand for the aforementioned end devices has therefore resulted in a corresponding surging demand for various ICs used in these devices, including CIS, DDI, and PMICs. In addition, the increasing adoption of cloud services, including IaaS, PaaS, and SaaS, has also generated a massive demand for various high-end CPUs and memory products used in the HPC platforms that power said cloud services.

On the whole, TrendForce believes that, with demand maintaining a healthy growth momentum for many kinds of end products, semiconductor components that are manufactured with the same foundry nodes will be competing for production capacity. Some categories of ICs will therefore experience a more severe capacity crunch due to the product mix strategies of respective foundries. In the short term, no effective resolution is expected for the undersupply situation in the foundry market.

Certain foundries will continue to expand their production capacities in 2021 as the semiconductor industry undergoes a structural change

With regards to the expansion plans of various foundries this year, tier-one and tier-two foundries will prioritize the development of different process nodes. More specifically, tier-one foundries, including TSMC and Samsung, will focus on the R&D, fab build-out, and capacity expansion for the 5nm and below nodes in response to the growing chip demand for HPC-related applications. On the other hand, tier-two foundries, including SMIC, UMC, and GlobalFoundries will primarily focus on expanding their production capacities of the 14nm to 40nm mature process nodes in order to meet the massive demand for next-gen telecom technologies (such as 5G and WiFi6/6E) and other diverse applications (such as OLED DDI and CIS/ISP).

Incidentally, it should be pointed out that SMIC’s capacity expansion plans have been constrained after the US Department of Commerce added SMIC to the Entity List, which prohibited the company from procuring US semiconductor equipment. However, SMIC still possesses enough funds for procuring non-US equipment and building new fabs, as the company is not only actively expanding its existing 8-inch and 12-inch wafer capacities, but also proceeding with the construction of its new fab in Beijing.

Apart from the aforementioned companies, other foundries, including PSMC, Tower Semiconductor, Vanguard, and HHGrace, will prioritize the capacity expansion of their 8-inch wafers (which are used for the 55nm and above nodes) to meet the demand for large-sized DDI, TDDI, and PMICs. These foundries, in contrast with their larger competitors, are primarily focusing on 8-inch capacity expansion due to the relatively high cost of DUV immersion systems used for the 40/45nm and below processes. For these companies, it is much more economically feasible to instead undertake capacity expansions for the 55/65nm and above nodes.

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

The LED video wall driver IC market has been suffering from insufficient production capacities on the supply side since 2020, according to TrendForce’s latest investigations. In order to ensure a sufficient level of wafer capacities at foundries, LED video wall driver IC suppliers therefore began raising prices for certain driver IC products by about 5-10% at the end of last year, and this price hike is expected to persist through 2021 as well.

On the demand side, various commercial activities and sporting events have been successively resuming as the COVID-19 pandemic is gradually brought under control. The resumption of these activities is expected to drive global LED video wall driver IC revenue for 2021 to US$360 million, a 13% growth YoY.

Chipone takes leadership position among suppliers in the highly oligopolistic LED video wall driver IC market

TrendForce indicates that that the LED video wall driver IC market is highly oligopolistic, as the top five suppliers collectively possessed more than 90% market share by revenue last year. With regards to the performances of the individual suppliers, Chipone took leadership position with a 36% share in the LED video wall driver IC market and dwarfed the other suppliers in terms of both revenue and shipment. On the other hand, Taiwan-based Macroblock, which primarily focuses on the high-end segment and holds relatively advanced technologies in its portfolio, took second place with a 20% market share.

Sunmoon took third place last year with a 13% market share. The company went public in December in an effort to raise more capital and strengthen its market position. Sunmoon has since become listed on China’s SSE STAR Market as a public company. Rounding out the top five list are Fine Made and Shixin Technology, which took fourth and fifth place, respectively. These two companies, along with others such as Developer Microelectronics, Sumacro, MY-Semi, and Xm-Plus, together constituted a 31% market share.

Tight 8-inch wafer capacities have led to noticeable price hikes for entry-level LED video wall driver ICs

Although the foundry industry expanded its 8-inch wafer capacities in 2021, driver IC demand for applications such as 5G smartphones, 5G base stations, automotive power devices, PMICs, and large-sized panel driver ICs remains strong. Incidentally, wafer capacities for driver ICs used in these aforementioned applications overlap with wafer capacities for LED video wall driver ICs to an extensive degree. At the same time, as small pixel pitch and ultra-fine pitch displays (LED video walls) become the market mainstream, LED video wall driver IC demand will likely undergo a corresponding growth as well.

However, in 2021, production capacities for LED video wall driver ICs will continue to be constrained by the demand for other products due to their low profitability. As a result, TrendForce expects prices of high-end LED video wall driver ICs to once again undergo a 5-10% increase in 2Q21, while entry-level ones will undergo a price hike of about 20-30% for the same period.

For more information on reports and market data from TrendForce’s Department of Optoelectronics Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com

As Samsung Display (SDC) decided to extend the manufacturing operations of its Korea-based Gen 8.5 LCD fab, and tier-two panel suppliers are still slow to reassign their production capacities from TV panels to IT panels, TrendForce expects total TV panel shipment for 2021 to reach 269 million units, which is relatively unchanged compared to 2020 levels. Panel suppliers will continue to focus on large-sized TV panels this year in response to several industry-wide developments, including M&A, reduced production capacities, improved manufacturing technologies, and increased panel demand. Furthermore, as the persistent price hike of TV panels continues to reduce the profit margins of TV sets, TV brands have started to gravitate towards larger, more profitable TV sizes. TrendForce therefore expects the average TV panel size this year to increase by 1.6 inches and move towards 50 inches.

TrendForce analyst Jeanette Chan indicates that the shift towards large-sized panels is an effective means of expending the production capacity of panel suppliers. Case in point, due to the limited production capacity for TV panels in 1H21, not only are TV panels currently in short supply, but TV panel prices are also on the rise. On the other hand, the demand for TV panels in 2H21 will depend on several key factors: first, whether the increased retail price of TV sets will hamper consumer demand; second, whether the pandemic will be effectively brought under control as more countries begin vaccinations; third, whether the impending global economic recovery will be a significant one. And finally, whether a market bubble will appear as a result of TV manufacturers’ overbooking panel orders in anticipation of potential hindrances including the price hike of materials in the upstream supply chain, the shortage of glass substrates due to such accidents as facility fires, the shortage of IC supply, and the extended shipping times.

Thanks to their persistently rising production capacity and successful acquisitions, China-based BOE and CSOT, the two largest panel suppliers in the world, are expected to collectively account for about 40% of total TV panel shipment this year. At the same time, BOE and CSOT are actively improving their technologies and making a push for high-end products, such as 8K, ZBD, and AM Mini LED. By leveraging their improved technologies and available funds, the two companies are likely to extend their operations upstream by systematically undertaking vertical integrations.

On the other hand, HKC, which is currently raising its production capacity, has garnered much attention in the market amidst the current shortage situation of TV panels. Along with its Changsha-based H5 fab, which is set to kick off mass production shortly, HKC possesses four Gen 8.6 fabs in total. By raising its production capacity and engaging in additional strategic partnerships with tier-one TV brands, HKC is expected to enter the top three ranking of panel suppliers by TV panel shipment for the first time ever, with a shipment of about 41.91 million units this year, a 33.7% increase YoY.

Taiwan-based AUO and Innolux are expected to experience YoY decreases in their shipments this year as their production capacities are relatively limited, although both companies’ efforts to optimize their products and engage in cross-industry partnerships have brought them certain competitive advantages. In particular, AUO is leading the panel industry in developing not only ultra-high-end products, such as 8K+ZBD, but also Micro LED displays, whereas Innolux holds competitive advantages in product diversity and in-house ODM services. It should be pointed out that these two Taiwanese companies are able to deal with the current IC shortage situation better than their competitors because their parent companies have longstanding business relationships with IC design companies.

With regards to Korean suppliers, although LGD and SDC have both prolonged their LCD manufacturing operations in Korea in order to satisfy the current bullish market demand, the two companies are primarily focusing on transitioning their offerings to new products. LGD will expand the OLED production capacity of its Guangzhou fab in 2Q21 as part of its effort to dominate the OLED market. As for SDC, the company has dropped out of the top six ranking this year as a result of its lowered production capacity. However, new TV sets featuring SDC’s QD-OLED panels are expected to officially hit the market in 4Q21, in turn driving SDC’s yearly TV panel shipment to 2 million units in 2022.

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

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