Smartphone AP shipments to China to continue falling in 4Q19, says Digitimes Research

Stella Weng, DIGITIMES Research, Taipei 0

Shipments of smartphone application processors (APs) to China are forecast to decline 4.6% on year in the fourth quarter of 2019, following a decline of 9.4% in the third quarter from a year earlier to 210 million units (excluding those used in ODM models made for Samsung), according to Digitimes Research.

Third-quarter smartphone AP shipments to China were also down 1.8% from a quarter earlier, affected by weak handset demand in the domestic market.

Digitimes Research believes that China's handset vendors will launch less 4G models in the fourth quarter as the industry is transitioning to 5G technology, and therefore weakening their demand for smartphone APs in the quarter.

China's handset vendors are also using more smartphone APs built using 7/8nm and 12nm processes, with the proportion of 7/8nm products against China's total AP shipments climbing from 10% in the second quarter to 17% in the third and is likely to reach 17.8% in the fourth.

Meanwhile, 12nm AP products have replaced 28nm models as the mainstream with their ratios to remain steady in the fourth quarter, Digitimes Research said.

Among AP vendors, MediaTek outraced Qualcomm to become the top AP supplier to Chinese handset makers in the third quarter, as its AP shipments increased significantly in that period both quarterly and yearly thanks orders from Huawei for its entry-level models as well as other smartphone SoC orders from Transsion.

Qualcomm saw its AP shipments in China decline 18% on year in the third quarter as local clients were forced to adjust their product mix to cope with the impacts caused by the US-China trade dispute. The US chipmaker is expected to see its AP shipments drop another 15.6% on year in the fourth quarter, Digitimes Research estimates.