Fourth-quarter 2022 smartphone application processor (AP) shipments to China-based smartphone vendors amounted to 137 million units, plunging 24% from the prior quarter and 20.3% from the prior year, and will continue to experience a double-digit decline in the first quarter of 2023, according to figures from DIGITIMES Research's latest report covering smartphone AP shipments.
Because of shrinking demand and high smartphone inventory at the channel in both China and emerging markets, AP shipments to China-based smartphone vendors had already experienced on-year declines for five consecutive quarters.
Looking into first-quarter 2023, AP shipments to China-based smartphone vendors are estimated to come to only 121 million units, decreasing 11.7% sequentially and 32.3% annually, partly influenced by the slow season. With most Chinese smartphone brands anticipating lackluster smartphone upgrade demand throughout 2023, the full depletion of their excess AP inventory is likely to take longer to achieve, the figures show.
The sluggish global economy dampened consumer confidence and weakened smartphone upgrade demand in the fourth quarter of 2022, leading to 4G AP shipments showing a larger on-quarter decline than those of 5G APs, narrowing MediaTek's lead over Qualcomm in terms of market share.
However, Qualcomm placing orders for its flagship APs, the Snapdragon 8 Gen 2 and 7475 to be made on TSMC's 4nm process for the first quarter of 2023 is expected to enable Qualcomm to moderately exceed MediaTek in shipment share in the first quarter thanks to the stable yield and the APs' outstanding performance.
In terms of the manufacturing process technology, the shipment share of smartphone APs made via 6/7/8nm processes is expected to further expand to nearly 70% in the first quarter of 2023, buoyed by demand for mid-range 5G smartphones and high-end 4G smartphones.
The shipment share of 4/5nm smartphone APs is set to climb from 25.9% in fourth-quarter 2022 to 27.4% in first-quarter 2023 as Qualcomm's and MediaTek's flagship and mid-to-high tier chips will all be made on the 4/5nm nodes.
