The gist of it: it’s a given that big discount events like the 618 festival and Black Friday bump up sales but that’s what they are supposed to do. However, once the results are out, a lot will depend on what the sell-through is for different product categories. If consumers shy away from newer technologies, opting for price over performance, the existing holding pattern for next generation display manufacturing investment is unlikely to change.
DigiTimes expects recovery in smartphone shipments by Chinese brands in Q2’23, following a period of weak sales. Sluggish sales, arising from macroeconomic factors such as high inflation, have caused a slump in the Chinese smartphone market during the first quarter of the year.
However, the annual 618 shopping festival, which is a major retail event in China similar to the US’s Black Friday, is anticipated to stimulate robust demand for smartphones. This is expected to narrow the year-on-year decline in smartphone shipments to less than 10%. The 618 festival, held in June, typically sparks significant consumer buying, which along with the commencement of the peak season in overseas markets, should contribute to this recovery.
Looking at Smartphone SoCs
The data on smartphone sales lines up with previous estimates of smartphone SoCs from DigiTimes:
- Sales Numbers: In Q2’23, smartphone SoC shipments to China-based vendors are estimated to reach 132 million units, a 10% increase from the previous quarter. However, on a year-over-year basis, there’s a more than 30% decline indicating overall sluggish demand. In Q1’23, smartphone SoC shipments were at 120 million units, a decrease of 12.1% from the previous quarter and 32.6% from the previous year.
- Market Share: MediaTek had the largest market share in Q1’23 at 48.3%, followed by Qualcomm at 44.2%. In Q2’23, China-based supplier Unisoc is expected to show significant growth in its 4G SoC shipments while Huawei’s subsidiary Hisilicon will resume shipment momentum. As a result, MediaTek and Qualcomm’s market share is predicted to decline to 46.6% and 42.4%, respectively.
- Manufacturing Process Technology: The share of 4/5nm smartphone SoCs among those shipped to China-based vendors is expected to grow to 36.4% in Q2’23, with Qualcomm and MediaTek both manufacturing their flagship and mid- to high-tier products on 4/5nm nodes. The share of 6/7/8nm smartphone chipsets is estimated to fall to 54.9% due to weaker inventory levels in overseas markets and a depletion in 4G SoC inventories.
