According to Digitimes Research, the ongoing global semiconductor chip shortage may affect smartphone shipments in the second quarter. Several top brands including Xiaomi, Oppo, and Vivo are likely to see their smartphone shipments decline year-on-year (YoY) during the April to June period.
A sudden rise in demand for IT products and networking devices has caused a global shortage of semiconductor chips. Since there aren’t many chip manufacturing companies out there, demand has outpaced supply. As such, OEMs are scrambling to secure semiconductor parts for their products. This has resulted in longer production times, or delayed delivery. The smartphone industry has been a victim of this chip shortage as well, with researchers estimating a decline in shipments in Q2 2021.
Global smartphone shipments to decline in Q2 2021
After an unprecedented slowdown last year due to the COVID-19 pandemic and the economic uncertainty around it, the smartphone market showed signs of recovery in the first quarter of this year. Global smartphone shipments grew a staggering 47 percent YoY during the first three months of 2021. Samsung, Apple, and Xiaomi were the top three vendors during the period.
Samsung‘s shipments grew 15.9-percent YoY to reach 75 million units in Q1 2021. Apple, which usually sees a slow first quarter, also registered strong 49.5-percent YoY growth in smartphone shipment during the period. It shipped 56 million smartphone units globally between January to March 2021.
Huawei continued to tumble, with its shipments dropping to nearly half that of the first quarter last year. The beleaguered Chinese company has run out of inventory for parts and components. It is now in no position to secure more. Huawei spin-off Honor, which is now an independent brand, struggled as well. The company was affected by rival vendors securing large-scale parts and components ahead of it.
Xiaomi, which has been reaping benefits from Huawei’s decline, meanwhile, further strengthened its position along with other Chinese vendors Oppo and Vivo. These brands have been targeting the low-cost 5G smartphone segment and have geared up their efforts to grab Huawei’s market. They had set big ambitions for 2021 but the ongoing chip shortage has forced them to reconsider those targets.
Smartphone shipments will likely recover in the second half of the year though. Although when this chip shortage will end is anyone’s guess, the arrival of new models in Q3 and Q4 should enable the industry to register a growth in shipment. Overall, global smartphone shipments in 2021 should be on the level with 2019 shipments, reaching about 1.35 to 1.40 billion units, Digitimes Research estimates.