Media Contact

Ms. Lindsay Hou

Tel: +886-2-8978-6488 ext.667

RSS Subscription
  DRAM  
  NAND Flash  
  Storage  
  Display  
  Consumer Electronics  
  LED  
  Green Energy  
  Internet of Things  
  Semiconductors  
  Automotive Electronics  
  Innovative Technological Applications  
       

Press Release


As COVID-19 Outbreak Disrupts 1H20 Smartphone Production, 2020 Production Projected to Decline 3.5%, Says TrendForce

Thursday , 03 / 05 / 2020 [ Analysts: TrendForce ]

  • 1Q20 global smartphone production falls by 13.3% YoY
  • Under the outbreak’s influence, 2020 5G smartphone production forecast adjusted to 200 million units

The smartphone supply chain is continuing to feel the effects of the COVID-19 outbreak. Owing to hindrances such as uneven factory work resumption statuses, a generally low rate of returning labor, and breaks in logistics and transportation, the supply chain has not been recovering as previously expected. The outbreak’s impact is projected to last 1-3 months, and the supply chain will not recover to normal levels until the second half of March at the earliest. Therefore, TrendForce is further reducing its previous projection of 1Q20 smartphone production from the pre-outbreak forecast of 307 million units to 270 million units, a 13.3% decrease YoY.

In terms of 1Q20 demand, sluggish Lunar New Year sell-through in the Chinese smartphone market led to excessively high stocks in the sales channels. On the other hand, the outbreak has spread to more than 70 countries since the second half of February, in turn affecting the global economy and, by extension, smartphone sales in the overseas markets. TrendForce holds a relatively conservative outlook towards the 2Q20 global smartphone market, with about 318 million units produced, an increase QoQ, but a 7.4% decrease YoY.

TrendForce anticipates that, assuming the outbreak can be contained by the end of 2Q20, the demand for smartphones will go into a noticeable upswing in 2H20. Furthermore, with the release of 5G and multi-camera phones, 2020 global smartphone production is expected to reach 1.35 billion units (pre-outbreak forecast: 1.41 billion), a 3.5% decrease YoY.

Slowdown of 5G subsidies in China may defer demand for 5G handsets

Notably, the government of China, which is the leading market in terms of 5G development, is allocating most of its current budget to disease prevention and stabilization, potentially reducing 5G telecom funding. Also, since 5G infrastructure is not yet widespread, and new applications of the technology yet remain in their infancy, consumers have taken a wait-and-see approach regarding 5G smartphones. On the other hand, as the outbreak considerably affected the global economy, the general public has conservatized its disposable incomes, thus deferring the demand for 5G. TrendForce is thus revising its 2020 5G smartphone production forecast from 250 million units down to 200 million units, with a 15% penetration rate in the overall smartphone market.

Should the outbreak intensify, market demand will become the most important consideration in the long-term analysis of the smartphone industry. Because of the interconnectedness of the global economy, the progression of outbreak damages not only China’s GDP, but also the overall global economy, leading to a cutback in consumer purchasing power and contracting the overall smartphone industry – including 5G– even further.

To keep updated with our press releases, please follow our social media pages. facebookGoogle+TwitterLinkin

TrendForce Press Center Copyright Notice
TrendForce grants you a limited license to use and/or republish any of the press releases on TrendForce Press Center for any legitimate media purpose (including copying and redistributing the content of press releases in any format and via any outlets), provided that you follow these license terms:

1. Reference TrendForce as the source on your works, or include a hyperlink to the original release on the TrendForce site.
2. Do not modify any press release wording, or maliciously alter its related information. Users are subject to any civil or criminal liabilities if the information displayed in the copy or redistribution of press releases is inconsistent with the original materials on TrendForce Press Center.
3. Do not modify or add hyperlinks, including but not limited to adlinks, within the press release. The authorization of press releases on TrendForce Press Center does not grant users the right to suggest, approve or endorse their value-added derivatives on behalf of this body.

If your citations of press releases contain mistakes and/or have information missing, TrendForce may, in its sole discretion, direct you to remove the content distributed via TrendForce from your site at any time and for any reason, and you agree to comply with such request.