76 Market focus: Smartphones Smartphone production falls a record 11% to 1.25bn units in 2020 as exits top-six This year will see a 9% rebound to 1.36 billion units, but Huawei will fall from third biggest smartphone maker to seventh, reckons TrendForce.

ue to the impact of the COVID-19 pandemic, the ‘new’ can capture consumers’ attention global smartphone production fell by record without the support from Huawei. Also, Huawei and D11% year-on-year (YoY) in 2020 to just the new Honor will be directly competing against each 1.25 billion units, according to market research firm other in the future, especially if the former is somehow TrendForce. freed from the US trade sanctions at a later time. The top six smartphone brands ranked by production With the new Honor seeking to ramp up production, volume for 2020, in descending order, are Samsung, Huawei will have more difficulty in regaining market Apple, Huawei, , and Vivo. The most share for smartphones, believes TrendForce. glaring change from the previous year is Huawei’s Looking ahead to the rest of 2021, TrendForce fore- market share. casts that the global smartphone market will gradually Honor will formally separate from Huawei and operate recover as people become accustomed to the ‘new as an independent smartphone maker at the start of normal’ resulting from the pandemic. Moreover, this 2021, notes TrendForce. The aim behind this spin-off year will likely see a relatively strong wave of device is to ensure the survival of Honor, which has become a replacement demand as well as demand growth in the major brand in the global smartphone market after emerging markets. Assuming that these conditions will years of labor. However, it remains to be seen whether materialize, annual global smartphone production for

Global smartphone production (in millions) and year-on-year change , 2016–2021.

semiconductorTODAY Compounds&AdvancedSilicon • Vol. 14 • Issue 10 • December 2020/January 2021 www.semiconductor-today.com Market focus: Smartphones 77

Top 7 ranking of global smartphone brands by production volume (in millions) and 5G market share, 2020–2021.

2021 is forecasted to rise by 9% to 1.36 billion units. Looking ahead to the CMOS image sensors Regarding the annual global ranking of smartphone rest of 2021, (CIS) contained per hand- brands for 2021, Huawei will see a further and signifi- set will each double in cant decline in its device production due to the effects TrendForce forecasts order to meet increased of the US export restrictions and the spin-off of Honor that the global smartphone specifications. as a separate entity operating in the smartphone smartphone market On the other hand, major market, expects TrendForce. Huawei is projected to will gradually Chinese foundry tumble from third place in 2020 to seventh place in 2021. Semiconductor Manufac- recover as people The top six for 2021, in descending order, will be turing International Corp Samsung, Apple, Xiaomi, OPPO, Vivo and Transsion, become accustomed (SMIC) has recently collectively accounting for almost 80% of the global to the ‘new normal’ been added to the US smartphone market. resulting from the Department of Commerce’s Nevertheless, the pandemic will remain the central pandemic. Entity List once again. This variable (or the biggest uncertainty) in the production is expected to exacerbate projection because it will continue to exert significant Moreover, this year the foundry industry’s influence on the global economy. Besides the pandemic, will likely see a already-strained produc- the performance of smartphone brands during 2021 relatively strong tion capacity. could also be affected by geopolitical instabilities wave of device The recent bullish out- and the lack of available production capacity in the look of smartphone semiconductor foundry market. replacement brands towards the 2021 demand as well as market and their attempt Penetration of 5G smartphones forecasted demand growth in to secure more semicon- to reach 37% in 2021, constrained by the emerging ductor supplies by foundry capacity increasing their smart- markets. Due to the Chinese government’s aggressive push for phone production targets 5G commercialization in 2020, global 5G smartphone Assuming that can potentially lead these production for the year rose to about 240 million units, these conditions will brands to overbook cer- a 19% penetration rate, with Chinese brands account- materialize, annual tain components at ing for almost 60% market share. While 5G will remain global smartphone foundries, notes Trend- a major topic in the smartphone market this year, Force. However, smart- various countries will also resume their 5G infrastructure production for 2021 phone brands may adjust build-out, and mobile processor manufacturers will is forecasted to their component invento- continue to release entry-level and mid-range 5G rise by 9% to ries from Q2/2021 to chips. As such, the penetration rate of 5G smartphones 1.36 billion units Q3/2021 and reduce their is expected to rise rapidly to 37% in 2021, for annual semiconductor procure- production of about 500 million units. ment activities if actual sales performances fall short of Under the optimistic assumption that the pandemic expectations, or if component bottlenecks remain can be resolved within the year, shipments for various unresolved, leading to a widening inventory gap end-products (including servers, smartphones and between bottlenecked and non-bottlenecked parts. notebook computers) will grow year-on-year compared Even so, TrendForce still forecasts an above-90% with 2020, notes TrendForce. In particular, the number capacity utilization rate for foundries in 2021. ■ of power management integrated circuits (PMICs) and www.trendforce.com www.semiconductor-today.com semiconductorTODAY Compounds&AdvancedSilicon • Vol. 14 • Issue 10 • December 2020/January 2021