Whether AI-powered smartphones will trigger a new wave of device upgrades has garnered significant attention across various sectors. Taiwan's wireless communication testing specialist, Sporton International, is particularly optimistic about the potential business opportunities and gross margin growth driven by the upcoming hybrid AI trend.
David Chou, Special Assistant to Sporton's Chairman, explained that unlike traditional AI processing, which occurs exclusively in the cloud, hybrid AI distributes and coordinates AI workloads between the cloud and edge devices. He emphasized that hybrid AI is suitable for almost all generative AI applications and device types, including smartphones, laptops, AR/VR devices, automobiles, and IoT.
Given these applications, Sporton is poised for growth across multiple areas, including devices equipped with MediaTek Dimensity 9400 and Qualcomm Snapdragon 8 Gen 4 chips. Additionally, testing demand for Windows on Arm PCs, 5G RedCap AIoT devices, and Wi-Fi 6E/7 is expected to drive further growth.
Regarding the AI smartphone market, Chou noted that AI applications are currently centered on image and video creation, real-time translation, and personal assistants. He is optimistic that future chip upgrades will enable smartphones with even more advanced AI features.
Chou also observed a decline in the release of new devices by Chinese Android smartphone vendors. Low-end models are becoming less common as brands move away from the previous "flooding the market" strategy.
Most smartphones released since 2023 are AI-powered, though the variety and quantity of these models remain under observation. In the second half of 2024, there will still be demand for 5G notebook testing, but progress in millimeter wave (mmWave) technology has been slow, according to Chou.
Supply chain insiders also indicated that mmWave's short power range and high frequency make it difficult to implement. Manufacturers are currently developing FR3, a compromise between mmWave FR2 and sub-6GHz.
Looking ahead, Chou noted that from 2024 to 2028, the industry is entering the 5G Advanced stage, with Wi-Fi 7 becoming a mainstream standard in 2024. AI applications will rapidly penetrate various wireless and mobile communication devices, with hybrid AI expected to bring new types of terminal devices.
AI applications heavily rely on high-speed wireless transmission, and large bandwidth and low latency of modern networks. Chou added that future base station construction is likely to adopt next-generation standards, and it remains to be seen whether the development of AR/MR/XR glasses will spark a new wave of 5G terminal applications.
Sporton reported NT$2.48 billion (US$77.31 million) in revenue for the first half of the year, with a net profit of approximately NT$772 million. The gross profit margin for the second quarter was 50.02%, up from 48.44% in the first quarter. The company is targeting a gross margin above 50% for the entire year of 2024.
In terms of regional revenue for the first half of 2024, Taiwan remains the largest market, accounting for 71.76%, followed by China at 13.44%, and North America at 2.35%.
Article translated by Willis Ke
