Chip Shortage: Counterpoint Research Lowers Its Smartphone Shipments Forecast For 2H21 By 3 Per Cent

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Some smartphone OEMs and vendors are reporting they had only received 80 per cent of their requested volumes on key components during Q2 2021

As the world stares at the ongoing semiconductor shortage that shows no sign of recovering, research firm Counterpoint Research has lowered its smartphone shipments growth forecast for the second half of 2021. 

According to Counterpoint Research’s latest Global Smartphone Quarterly Shipment Forecasts, total units shipped for 2021 are expected to grow by only 6 per cent annually to 1.41 billion units; Counterpoint had previously called for 9 per cent annual growth to 1.45 billion units.

The semiconductor crisis, which first began following the onset of the COVID-19 pandemic in 2020, has since aggravated numerous industries starting from automobiles to PCs. Experts and industry veterans have made several remarks on how long the shortage is expected to last. 

“The smartphone industry was set for a strong rebound this year after COVID-19 had hit the market hard in 2020. Smartphone vendors placed large component orders from the end of last year, and consumer demand coming from delayed replacement purchases buoyed the market in the first quarter,” said the report.

The report added that when the shortage first began, the smartphone industry had managed to grow despite shortages in components like DDIs and PMICs. This was done by advanced planning and order placing along with hoarding of certain components like Application Processors (AP) and camera sensors which are typically much higher value than DDIs or PMICs.

However, some smartphone OEMs and vendors are reporting they had only received 80 per cent of their requested volumes on key components during Q2 2021, and the situation seems to be getting worse as we move through Q3 2021. Some smartphone makers are now saying they are only receiving 70% of their requests, creating multiple problems.

In the case of application processors, one of the most crucial elements in smartphones, the shortage was triggered by low yield rates in newly established fab lines. With the situation seeming to persist it caused a chain reaction throughout the industry. 

Tom Kang, Research Director at Counterpoint Research commented, “the semiconductor shortage seems to affect all brands in the ecosystems. Samsung, Oppo, Xiaomi have all been affected and we are lowering our forecasts. But Apple seems to be the most resilient and least affected by the AP shortage situation”.

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