The global production volume of smartphones worldwide is expected to peak in the third quarter on account of effects from the peak shipment season, subsidies from Chinese telecom operators and back-to-school sales. This demand surge will also drive the smartphone component markets, and supply will become tight for memory, panels, application processors and other key parts. The latest report from the global market research firm TrendForce finds that Chinese smartphone brands will continue to witness substantial increase in their production volumes through 2016, with their average year-on-year growth rate reaching 11%.
The first quarter conventionally is when the LCD panel market has abundant supply. However, the February earthquake in southern Taiwan and Samsung Display (SDC) having problems with transitioning to a new manufacturing process resulted in some loss of the panel industry’s overall capacity during the period. Furthermore, panel makers gained confidence in the market as the efforts to consume excess TV panel inventories were more efficient than anticipated.