The business outlook for the handset SoC vendors will remain weak in the second half of 2023, even though related suppliers have excerpted efforts to improve product specifications to boost shipments, according to industry sources.
The sources noted that the global top two handset SoC suppliers, Qualcomm and MediaTek, have accelerated the launch of new SoC platforms for entry-level and midrange handsets to meet the diverse customer demands.
While a recent Ericsson report indicated that the global 5G smartphone shipments will likely return to a growth track in this year's second half, sources at Taiwan's handset supply chain claimed that they see no signs of a recovery in smartphone demand any time soon. Worse, some sources said there is even a possibility of revising the outlook downward.
As such, it remains to be seen whether the two major handset SoC vendors could boost their shipments through a specification upgrade race, said the sources.
In response to waning market demand, Qualcomm initiated a price war in the second quarter to accelerate inventory clearance, indicating that it is no longer solely focused on pursuing a leading market share in the flagship SoC segment, and instead, it aims to maintain overall shipment volume as much as possible.
In addition, Qualcomm recently launched its 4nm Snapdragon 4 Gen 2 platform products catering to entry-level smartphone applications.
The sources noted that Qualcomm's moves have added additional pressure on MediaTek, both in shipment volume and process nodes.
To consolidate its market share in the entry-level and midrange handset SoC market, MediaTek thus released its Dimensity 6200+ SoCs, built using a 6nm process node.
Although Qualcomm and MediaTek have tried to boost their SoC shipments by leveraging on specs upgrades and traditional peak seasonal effect, the response from related handset brands has been lackluster, remarked the sources.
In particular, the sources added rising speculations indicating that some Android phone vendors may continue to lower their shipment targets in the second half.
Chinese brands are pessimistic about their prospects, believing that the Chinese smartphone market is unlikely to improve in the short term, added the sources.
Article translated by Steve Shen
