Global smartphone shipments might decline 2.1 percent next year as a shortage of memory chips drives up costs and squeezes production, industry tracker Counterpoint Research said yesterday.
That marks a dramatic reversal from an estimated 3.3 percent gain this year, with the influential research firm slashing its projection for next year from a previous estimate of marginal 0.45 percent growth.
The average selling price for handsets is set to rise 6.9 percent globally next year, reflecting a 10 percent to 25 percent jump in the overall cost of components, Counterpoint said in a research report.
Photo: AFP
The global artificial intelligence (AI) build-out has spurred semiconductor producers this year to prioritize advanced memory for Nvidia Corp accelerators over more basic products. That in turn has fomented a shortage of the DRAM that is indispensable in electronics from laptops and electric vehicles to medical devices and appliances.
In the past few months, consumer electronics makers including Xiaomi Corp (小米) have sounded the alarm about potential price increases, while others including Lenovo Group Ltd (聯想) have begun stockpiling memory in anticipation of rising costs.
Nintendo Co’s shares have declined most of this month as concerns grow about the impact on its flagship Switch 2 console and profitability.
With smartphones, Chinese brands such as Honor Device Co (榮耀) and Oppo Mobile Telecommunications Corp (歐珀) are seen as more vulnerable because of their lower margins.
The memory deficit is likely to hurt entry-level smartphones in particular, Counterpoint said.
“Apple and Samsung are best-positioned to weather the next few quarters,” Counterpoint senior analyst Yang Wang said. “But it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins. We will see this play out especially with the Chinese OEMs as the year progresses.”
The consumer impact could be felt in several ways.
One approach would be for companies to push users to more premium models, where the profit impact will be less severe, the research firm said.
Other options include reusing old components, downgrading other specifications such as cameras, or just selling handsets with less memory, Counterpoint said in its report.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
OPTION: Uber said it could provide higher pay for batch trips, if incentives for batching is not removed entirely, as the latter would force it to pass on the costs to consumers Uber Technologies Inc yesterday warned that proposed restrictions on batching orders and minimum wages could prompt a NT$20 delivery fee increase in Taiwan, as lower efficiency would drive up costs. Uber CEO Dara Khosrowshahi made the remarks yesterday during his visit to Taiwan. He is on a multileg trip to the region, which includes stops in South Korea and Japan. His visit coincided the release last month of the Ministry of Labor’s draft bill on the delivery sector, which aims to safeguard delivery workers’ rights and improve their welfare. The ministry set the minimum pay for local food delivery drivers at
RSS