Digitimes Research cuts 5G smartphone shipment forecast

Stella Weng, DIGITIMES Research, Taipei 0

Digitimes Research has revised downward its 5G smartphone shipment forecast for the second quarter and also all of 2020 in the wake of the coronavirus impact.

With the outbreak disrupting production and dampening consumer confidence, 5G handset shipments in China in the second quarter of 2020 are expected to slip 26.6% from the pre-epidemice forecast of 30 million units to 22 million units.

The proportion of 5G smartphone APs shipped to China-based smartphone brands has also been reduced to only 9.5% for the first half of 2020 with 4G chips to account for 85% of the shipments.

Digitimes Research believes if China's coronavirus outbreak can be gradually contained starting the second quarter of 2020, China will still be the biggest market for 5G handset shipments in 2020.

With Chinese smartphone brands eagerly looking to raise 5G handsets' penetration rate in China with inexpensive 5G devices and Qualcomm, MediaTek and Samsung pushing for the mass production of their mid-range 5G application processors, China-based smartphone brands are expected to be able to release 5G smartphones that are priced between US$280-360 starting the second quarter of 2020.

Qualcomm, MediaTek and Samsung have begun mass production of mid-range to high-end 5G SoCs since the fourth quarter of 2019. Qualcomm's Snapdragon 765/765G chips have the most comprehensive support on 5G spectrums, while MediaTek's Dimensity 1000L is primarily supporting Sub-6GHz as the chip is targeting mainly the China market. Samsung's Exynos 980 is highly customized for Vivo's X30 smartphone.

At the moment, mid-range to high-end 5G APs feature an ASP six folds that of 4G ones, making it difficult for 5G smartphone prices to come down. With the coronavirus outbreak undermining China's consumer demand, mid-range 5G APs with friendlier pricing are expected to become a key driver in boosting 5G smartphone shipments in 2020.

Digitimes Research believes the AP suppliers will begin shipping their mid-range 5G chips in the second quarter of 2020 and will not be deterred by the epidemic. Huawei, Xiaomi, Oppos and Vivo will start releasing their 5G smartphones priced between US$280-360 in the second quarter of 2020, driving up China's 5G smartphone shipments.

Digitimes Research also expects Taiwan Semiconductor Manufacturing Company's (TSMC) tight capacity in the first half of 2020 will be eased because of 5G handsets' reduced shipments.