Wed, Feb 12, 2020 - Page 12 News List

Global smartphone output to fall amid closed plants

By Natasha Li  /  Staff reporter

Global smartphone production is expected to decline 12 percent annually this quarter, as plant activity is delayed in China due to Beijing’s efforts to contain the 2019 novel coronavirus outbreak, market intelligence firm TrendForce Corp (集邦科技) said on Monday.

Output is expected to drop to a five-year low of 275 million units, TrendForce said in a report.

Uncertainty about when employees would return to work in China would lead to a delay in the monthly delivery of key components needed in smartphone production, it said.

The import and export of some key components, such as active and passive components, as well as camera modules, would further affect the production of smartphones due to an industry shortage, it added.

The outbreak is not expected to cause an immediate break in the supply chain, as smartphone manufacturers stocked up their inventories before the Lunar New Year holiday and the first quarter is a low season, TrendForce said.

Samsung Electronics Co, whose production is mainly based in Vietnam, is expected to be mostly spared from the outbreak’s effects, the report said.

However, as the company sources some of its components from China, overall production is expected to decline 3 percent to 71.5 million units, compared with a previous forecast of 73.7 million units, it said.

China’s Huawei Technologies Co (華為) would fare worse, especially following poor sales during the Lunar New Year holiday, TrendForce said.

Having been blacklisted by the US and barred from installing Google Mobile Services on its new models, Huawei is becoming increasingly reliant on its home market, but the outbreak has prompted TrendForce to trim its previous forecast for Huawei by 15 percent to 42.5 million units this quarter, it said.

TrendForce also lowered its output forecasts for other Chinese smartphone vendors, such as Oppo Mobile Telecommunications Corp (歐珀) and Vivo Communication Technology Co (維沃), as they are equally dependent on domestic demand.

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