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Smartphone industry faces tight component supply in 2017

by on16 January 2017


Mainstream devices now use larger displays than before


There is an increasing possibility that the smartphone industry may be headed towards supply shortages this year as China-based vendors are demanding rising volumes several key components, according to sources within Taiwanese supply chains.

This year, Chinese vendors including Oppo, Vivo and Huawei are expected to enhance their presence of mid-range and high-end smartphones in order to raise average selling prices (ASPs). As such, they have scaled up demand for components including displays, NAND flash storage and optical sensing devices. This year, global smartphone shipments will grow by about 4.5 percent to reach 1.4 billion units, and of these around 634 million will belong to Chinese brands. The latter will be focused mainly on developing foreign market presence in the US, EMEA, and other parts of Asia.

In Q3 2016, Chinese vendors Huawei, Oppo and BKK Communication Equipment managed to take 21 percent of the global smartphone market, reaching a combined 75 million orders. For now, however, Samsung continues to be the number one global smartphone brand but managed to tie with Oppo in the Asian region at 12.1 percent market share during Q3 2016. In third place was Vivo at 10.4 percent, followed by Huawei in fourth at 9.8 percent, while Apple trailed at 8.7 percent.

High-end camera modules experience more demand

The latest report claims that Samsung and Apple will continue to lead the global smartphone market, followed by China-based Huawei, Oppo and Vivo. The sources claim that demand for high-end camera modules will rise in 2017, primarily as Samsung and others are now adopting 16-megapixel lenses in some midrange device lineups.

A rush to secure OLED panels

With recent market rumors claiming that Apple will be securing OLED panel supplies from LG this year, Chinese vendors are now responding by placing orders for large volumes of small and mid-size OLED panels in a move that is poised to cause shortages throughout the remainder of the year.

The latest research now shows a gradual shift in display size on “mainstream” smartphones devices from a previous 5-inches to between 5.5 and 5.7-inches. This trend is set to keep supplies of smaller and mid-size TFT LCD panels in short supply this year as panel makers focus on delivering more volume at the larger sizes.

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