Supply chain
China smartphone AP shipments brace for steep drop in 2Q20, says Digitimes Research
Stella Weng, DIGITIMES Research, Taipei

Shipments of smartphone-use application processors (AP) in the China market are expected to experience a steep drop of 37.8% on year in the second quarter of 2020, as China's handset makers are adjusting their inventory for APs due to weak consumer confidence in the local market and the impact on their shipments to India and other emerging markets in the wake of coronavirus pandemic, according to Digitimes Research.

Smartphone AP shipments came to 135 million units in China in the first quarter 2020, decreasing over 30% from a quarter earlier and 12.2% from a year earlier, as Chinese handset brands, particularly Huawei, were adjusting downward their shipments due to the outbreak and weak consumer demand for 5G models lacking killer applications, Digitimes Research has found.

Qualcomm was the top vendor with a 41.8% share in China's smartphone AP market in the first quarter, followed by MediaTek with 39.6% and HiSilicon Technologies with 15.2%.

Looking ahead, HiSilicon will see its share edge up to 23.4% in the second quarter, bolstered by strong pull-ins from parent company Huawei. Meanwhile, Qualcomm and MediaTek are likely to see their shares drop to 37.4% and 36.2%, respectively, in the quarter, Digitimes Research estimates.

Qualcomm and MediaTek are expected to experience double-digit sequential and annual declines in their AP shipments to China in the second quarter, as their major clients including Xiaomi, Oppo and Vivo all brace for slow sales in the domestic market due to aggressive campaigns from Huawei, while their shipments to India, Africa and other emerging markets will remain constrained due to the virus.

Smartphone APs built with 7/8 nm process nodes accounted for 34.9% of China's total mobile AP shipments in the first quarter, surpassing those made with 12nm process to become mainstream technology.

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