According to data from IDC, Samsung Electronics became the global smartphone manufacturing leader in the second quarter of 2023, closely followed by Foxconn, Huaqin, Oppo, and Longcheer. However, fueled by orders for the iPhone 15 series, which is set to launch soon, from Apple, Foxconn has a chance to overtake Samsung in the fourth quarter and retake the top spot in the smartphone manufacturing sector, according to sources from the upstream supply chain.
Due to factors like high inflation and extended replacement cycles, the smartphone industry is estimated to ship less than 1.2 billion smartphones worldwide in 2023, a 5-6% decrease compared to 2022. Despite that, the shipment rankings of smartphone manufacturers are rapidly changing due to the power fluctuations of smartphone brands.
There have been reports about key component shortages in the iPhone 15's upstream supply chain, which would lead to higher pricing for the iPhone 15 Pro and Pro Max models. This will result in the iPhone 15 shipment volume in the fourth quarter being lower than Apple's previous expectations. Nevertheless, as the iPhone's main manufacturer, Foxconn is still expected to regain the top spot in smartphone manufacturing shipments. It's worth noting that among the top five smartphone manufacturers worldwide, only Foxconn is based in Taiwan, the sources noted.
The overall decline in brand smartphone shipments in the first half of 2023 has predictably affected the smartphone manufacturing sector as well. IDC data showed that in the second quarter of 2023, the global smartphone production volumes saw a 3.4% on-year decrease and an 8.1% on-quarter decrease.
The pressure on brand operations has led the top five smartphone manufacturers to receive more outsourcing orders. In the second quarter of 2023, smartphone brands outsourced 8.8% more orders compared to the first quarter. However, low-end smartphones still have the largest proportion of all outsourced orders, which has made it challenging for manufacturers to improve their gross margin and operating profit margin.
Samsung currently still manufactures a significant portion of its mid-to-high-end smartphones in its production sites in South Korea and Vietnam. Meanwhile, it outsources some of its M-series smartphone orders to Wingtech and Longcheer to save costs.
Huaqin's main customers are Samsung, Xiaomi, and Vivo, while Oppo not only produces own-brand Reno and A-series smartphones but also accepts smartphone manufacturing orders from Realme.
