11 July 2016 Asia Pacific Equity Research Semiconductor Devices Asia Semiconductor Sector Research Analysts SUPPLY CHAIN RESEARCH Randy Abrams, CFA 886 2 2715 6366
[email protected] China smartphone chain: Some lift from better Jerry Su volumes and new markets 886 2 2715 6361
[email protected] Figure 1: China also shifts to new applications to supplement smartphones Semiconductor market size (US$mn) Auto, IoT, VR and wearables Pauline Chen % of smartphone market 120,000 80% 886 2 2715 6323 105,000 75%
[email protected] 90,000 70% 75,000 65% Sam Li 60,000 60% 852 2101 6775 45,000 55%
[email protected] 30,000 50% 15,000 45% Derrick Yang 0 40% 886 2 2715 6367 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
[email protected] Smartphones Auto IoT Wearables Kyna Wong VR Broad IoT % of smartphone 852 2101 6950 Source: Company data, Credit Suisse research
[email protected] We provide our bi-yearly update on China smartphone trends following MWC, Haas Liu CES Shanghai, and meetings across the chain. The market is healthier through 886 2 2715 6365 1H16 with unit demand up 10% YTD and supplemented by continuous content
[email protected] gains and a push into IoT/connected home, auto, wearables and VR. ■ Key themes from our meetings: (1) China / Export mid-range smartphone demand healthy; (2) Processors see MediaTek take share but at aggressive pricing; (3) Smartphone platforms further upgrade camera, display, memory and processing; (4) China brands accelerate diversification into a diverse range of IoT products (wearables, home automation, drones and robots); and (5) VR proliferates across multiple Chinese platforms.