Consumer Electronics


2021-06-30

QLED/OLED TV Shipment Projected to Break Records This Year Thanks to Brands’ Focus on Large-Sized, Mid- to High-End TVs Says TrendForce


Continued price hikes of TV panels, as well as a simultaneous shortage and price hike of semiconductor components required for manufacturing TV sets have forced TV brands in 2021 to reduce the shipment of their mid- and small-sized TVs in favor of the more profitable large-sized, mid- to high-end TVs instead, according to TrendForce’s latest investigations. This shift is expected to propel the annual shipment of QLED TV for 2021 to 11.02 million units, a 22.4% YoY increase. On the other hand, OLED TV shipment for 2021 is expected to reach 7.1 million units, an 80% increase YoY. As such, both product categories are expected to break records in terms of shipment this year.

It should be pointed out that, as increased vaccinations in Europe and the US bring about an imminent easing of border restrictions, TV demand generated by the stay-at-home economy is likely to slow down. In addition, TV panel costs have remained sky-high and shown no signs of downward movement. Hence, TV brands are moving towards larger product sizes and better specifications in order to maximize profits and minimize the financial losses incurred by selling mid- and small-sized TVs, which have relatively low margins. Given the downscaling of these less profitable models, TV brands’ annual shipments will likely suffer a corresponding drop. TrendForce therefore expects total TV shipment this year to reach 220 million units, a 1.4% YoY increase.

Samsung’s Neo QLED series will help propel annual shipment of Mini LED backlight TV to three million units in 2021

There has been a sharp drop in the profitability of mid- to small-sized TVs this year. In response, during the replacement period between old and new models, market leader Samsung Electronics has not only lowered the retail prices of its QLED products to attract consumers, but also released its new Neo QLED lineup, which features Mini LED backlights and resolutions ranging from UHD to 8K. Samsung’s QLED TV shipment is expected to undergo a 17% YoY increase to 9.1 million units this year, the highest annual shipment in history. In particular, Samsung’s lineup includes about 1.5 million Mini LED backlight TVs, mostly with 65-inch and 55-inch displays, and these sizes account for 33% and 30% of the company’s total Mini LED backlight TV shipment, respectively, while the ultra-large, 75-inch model will account for 17%.

TCL, on the other hand, released a relatively affordable 75-inch Mini LED backlight TV in 2020, with a 65-inch model released this year. TCL’s annual shipment of Mini LED backlight TV for 2021 will likely reach 800,000 units. Apart from the aforementioned two brands, Xiaomi and LG are also eager to enter the Mini LED backlight TV market. As such, TrendForce forecasts a total annual Mini LED backlight TV shipment of three million units for 2021.

While brands expand their production lines for OLED TVs, LG and Sony are expected to seize nearly 80% of OLED market share

At the moment, OLED TVs have been attracting consumer attention in the high-end TV market primarily due to their excellent image quality through high color saturation and contrast. As LG Display installs additional OLED capacity via its Gen 8.5 production line in Guangzhou this year, there will likely be a corresponding increase in OLED TV supply as well as a diversification of OLED TV sizes. Also, annual OLED TV shipment is expected to break records once again this year, as brands are willing to expand their OLED TV product lineups because strategic reductions in OLED panel costs have now significantly narrowed the gap between the cost of OLED panels and that of equivalent LCD panels, thereby giving OLED panels a cost advantage that allows TV brands to reap increased profitability. With regards to TV brands, LG Electronics remains the industry leader in terms of OLED TV shipment this year with a market share of more than 50%, while Sony takes second place with a 20% market share. Other Japanese brands (Panasonic, Sharp, etc.) and Chinese brands (Skyworth, Hisense, Xiaomi, etc.) are likewise expected to experience shipment growths going forward.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

2021-06-23

Panel Costs Account for More Than 60% of 21.5-inch Monitor Retail Prices, with LCD Monitor Panel Prices Likely to Keep Rising

Given the expected price hike of LCD display panels in 2021 and the high demand for electronic products that has persisted since last year due to the stay-at-home economy, various IT product suppliers are under tremendous stress from not only the enormous number of client orders, but also surging quotes from panel manufacturers. And LCD monitor manufacturers are no exception.

According to TrendForce’s investigations into monitor pricing, the cost of the LCD panel typically accounts for about 40-50% of a monitor’s retail prices. Conversely, in the high-end segment, panel costs account for about 30-40% of monitor retail prices due to other factors, such as the inclusion of industrial design and premium components.

Regarding the sales of mainstream products, monitor brands face three different sources of pricing pressure. Put in layman’s terms, these sources are equivalent to taking an SAT, hunting for jobs post-college, and (for middle-aged people) transitioning one’s career after being fired.

Despite ample room for panel prices to change, raising retail prices of monitors remains difficult, and such prices hikes lag far behind the increase of panel costs

More specifically, 27-inch IPS FHD products can be analogized to the SAT, as monitor brands are relatively well-equipped to deal with increases in panel costs for this product category. For the most part, panel costs account for less than 50% of these products’ retail prices in 2021. In other words, since 27-inch IPS FHD monitors are still relatively profitable for monitor brands, brands will attempt to increase the share of these products in their shipment of all product categories.

With regards to 23.8-inch IPS products, monitor brands face pressure that is about equivalent to the job search process that takes place after graduating from college. Panel costs have been accounting for more than 40% of monitor retail prices since February. In view of rising panel costs, this percentage is expected to reach 50-55% in 3Q21, which is approximately the breakeven point for monitor brands.

However, because brands will attempt to maintain a certain level of shipment, 23.8-inch IPS monitors will continue to remain the market mainstream.

On the other hand, brands do not prioritize the sales of 21.5-inch TN products as much as they do the other products. Panel prices for this product category have been rising since 2Q20, and this price hike has been intensifying since 2H20.

Entering October 2020, panel costs began accounting for a considerable part of retail prices, in turn surpassing 50% in January 2021 and 60% in June 2021. Since panel manufacturers are disinclined to continue supplying 21.5-inch TN panels, the gap between supply and demand will persist, resulting in either an upward trajectory or bullish outlook for panel prices. In other words, the relative high costs of these panels will not only remain unresolved, but also likely worsen going forward.

TrendForce therefore believes that monitor brands may need to package their 21.5-inch TN monitors within bundle sales in order to offset the rising costs of panels. Alternatively, brands may also raise the retail prices of these products by about US$20-30 in order ensure that panel costs account for only about 50% of the monitors’ retail prices.

On the whole, the magnitude of financial losses incurred by monitor brands through price hikes, panel shortages, or the continued sale of 21.5-inch TN monitors will become the key determinant to how monitor brands adjust the volume of other mid-sized and large-sized products within their total monitor shipments.

(Cover image source: Unsplash)

2021-06-22

Tight Supply of Smartphone AMOLED DDI Likely to Limit Future Growth of AMOLED Panel Market, Says TrendForce

Thanks to the increased adoption of AMOLED panels by major smartphone brands including Apple and Samsung, the penetration rate of AMOLED panels in the smartphone market is expected to reach 39.8% in 2021 and 45% in 2022, according to TrendForce’s latest investigations. As AMOLED panels see increased adoption, the consumption of AMOLED DDI will undergo a corresponding increase as well. However, not only are the process technologies used for AMOLED DDI manufacturing currently in short supply, but some foundries are also yet to finalize their schedules for expanding their AMOLED DDI production capacities. Given the lack of sufficient production capacity, the increase in AMOLED panel shipment may potentially be constrained next year.

Regarding process technologies, the physical dimension of AMOLED DDI chips is generally larger compared to other chips, meaning each wafer yields relatively fewer AMOLED DDI chips, and more wafer inputs are therefore needed for their production. The vast majority of AMOLED DDI is currently manufactured with the 40nm and 28nm medium-voltage (8V) process technologies. In particular, as 40nm capacity across the foundry industry is in tighter supply compared to 28nm capacity, and TSMC, Samsung, UMC, and GlobalFoundries are the only foundries capable of mass producing AMOLED DDI, an increasing number of new wafer starts for AMOLED DDI are being migrated to the 28nm node instead.

Regarding wafer supply, the foundry industry is currently unable to fulfill client demand for 12-inch wafers. Hence, 12-inch capacities allocated to AMOLED DDI production are relatively limited as well. At the moment, only TSMC, Samsung, and UMC are able to allocate relatively adequate wafer capacities, although their capacity expansion efforts are still falling short of growing market demand. In addition, while SMIC, HLMC, and Nexchip are developing their respective AMOLED DDI process technologies, they have yet to confirm any mass production schedules. TrendForce therefore expects that the additional AMOLED DDI capacities to be installed next year will remain scarce, in turn further limiting the potential growth of the AMOLED panel market.

AMOLED DDI suppliers must overcome the issues of limited production capacity and technological difficulties in R&D

Other than the issue of tight production capacities, the difficulty of AMOLED DDI development is further compounded by the fact that each panel manufacturer has its unique specifications of AMOLED panels. For instance, panel manufacturers differ in terms of their display image uniformity (including the calibration of on-screen picture quality via eliminating display clouding, poor color/brightness compensation, and sandy mura). Hence, in order to address the discrepancies among panels manufactured by different companies, IC suppliers must adopt different compensating solutions and account for different parameters. Panel manufacturers therefore are likelier to adopt DDI from IC suppliers whose solutions have already been in mass production.

If prospective IC suppliers were to enter the AMOLED DDI market, they would need to overcome various difficulties in AMOLED DDI development, including long processes of validation and revision, in order to mass produce at scale. As well, each individual panel supplier requires its own different set of IP cores (referring to the various functional modules in an IC) and specifications, making it difficult to manufacture AMOLED DDI that is universally compatible with all AMOLED panels. For instance, ICs that are supplied to Korean panel manufacturers by AMOLED DDI suppliers are incompatible with AMOLED panels from Chinese panel manufacturers, which require new wafer starts with their own requirements.

On the whole, other than certain DDI suppliers which have their own subsidiary foundries or have longstanding foundry partners capable of DDI production, TrendForce believes that fabless AMOLED DDI suppliers must not only secure a stable and sufficient source of foundry capacity, but also possess sufficient technological competency for mass production, in order to successfully expand their presence in the AMOLED DDI market.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

2021-06-21

iPhone Production for 2021 Projected to Reach 223 Million Units Due to Increased Vaccinations and Impending Easing of Lockdowns in the US/Europe, Says TrendForce

This year, the US and Europe, which are Apple’s main markets for iPhone devices, are seeing an easing of the pandemic and expecting an economic recovery. Furthermore, Apple is expected to benefit from Huawei’s abandonment of some market share for high-end smartphones, and the sales of the new iPhone devices in 2H21 will likely be boosted thanks to this development. On the whole, the outlook on Apple’s performance in the smartphone market for the whole year is positive, according to TrendForce’s latest investigations. Although the ongoing capacity crunch in the foundry industry will have a constraining effect on Apple in terms of ramping up its iPhone production and growing its market share in the future, TrendForce is still maintaining a cautiously optimistic view and forecasts that the annual total iPhone smartphone production for 2021 will grow by around 12.3% YoY to 223 million units, with additional room for a slight growth going forward.

Apple will prioritize the optimization of existing functions with the iPhone 12s series, while retail prices are expected to remain on par with last year’s release of iPhone 12 models

Apple plans to unveil the next generation of iPhones, tentatively called the iPhone 12s series (official name has yet to be revealed), in September 2021, and the smartphone market has placed the spotlight on the new handsets’ physical appearances as well as retail prices. Regarding the general outward appearance of the upcoming iPhone devices, the notch on top of the screen will shrink due to the decreased size of their sensor housings. Apart from this, other upgrades will mostly relate to the optimization of existing functions and features. All in all, the degree of innovation is not particularly significant in terms of appearance, and the four new models can be regarded as an extension to the iPhone 12 series. Because of this, TrendForce also believes that Apple will continue the proactive pricing strategy that it adopted in 2020 so as to maintain its market share for high-end smartphones. Even though prices of some key components have risen due to tightening supply, Apple is taking into account of the growth in the revenue of peripheral services in relation to the growth of iPhone sales. This means that the starting price of the upcoming iPhone series will likely be relatively on par with the starting price of the iPhone 12 series.

For the latest iPhone models, Apple has made certain upgrades to the handsets. TrendForce here summarizes the key components of the latest iPhone models, including the processor, display, memory, and camera. The iPhone 12s series will feature the A15 processors manufactured at TSMC’s 5nm+ node. Regarding the display, the new models will be equipped with flexible AMOLED panels with On-cell touchscreen technology; the two Pro models will also feature a 120Hz refresh rate. Judging by the iPhone 12s series’ starting prices as well as the differences among various models’ retail prices, TrendForce expects the new handsets’ memory capacities to remain the same as their iPhone 12 counterparts. On the camera front, Apple has upgraded all iPhone 12s handsets’ main cameras to include sensor-shift image stabilization technologies. For the Pro models, not only are their ultra-wide cameras now equipped with 6P lens (which is an upgrade over the previous generation), but they are also capable of autofocus functions. Notably, it should be pointed out that LiDAR scanners are available in the Pro models only.

On the whole, TrendForce expects the latest iPhone devices to account for about 39% of Apple’s total annual production volume for 2021. As all iPhone 12s handsets contain 5G modems, the share of 5G models in the overall iPhone production is projected to expand massively from 39% in 2020 to 75% in 2021. Furthermore, Apple is expected to focus on driving sales of the three non-mini models in the iPhone 12s series in view of the fact that the iPhone 12 mini (which reached End-of-Life ahead of time in 2Q21) suffered disappointing sales performances compared to other models in the iPhone 12 family.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

2021-05-10

Growth in Total Smartphone Production for 2021 Drops to 8.5% YoY Due to India’s Second Wave of Coronavirus, Says TrendForce

TrendForce’s investigations find that India has become the second largest market for smartphones since 2019. However, the recent worsening of the COVID-19 pandemic in the country has severely impaired India’s domestic economy and subsequently dampened various smartphone brands’ production volume and sales (sell-in) performances there. TrendForce is therefore revising the forecasted YoY growth in global smartphone production for 2021 from 9.4% down to 8.5%, with a yearly production volume of 1.36 billion units and potential for further decreases going forward.

TrendForce further indicates that the top five smartphone brands (Samsung, Apple, Xiaomi, OPPO, and Vivo) have either set up assembly plants in India or sought assistance from EMS providers with operations in the country. Hence, the share of made-in-India smartphones has been on the rise over the years, even though the majority of the domestically manufactured devices are still for meeting the demand of the home market. Judging from the current state of Indian smartphone manufacturing, TrendForce expects the second wave to reduce the country’s smartphone production volume for 2Q21 and 3Q21 by a total of 12 million units, in turn resulting in a 7.5% YoY decrease in smartphone production in India for the whole year.

In India, the second wave of COVID-19 has heavily impacted the middle and upper classes and weakened the sales of smartphones in 2Q21

India’s demographic dividend has generated an enormous demand in the domestic smartphone market. As well, the Indian government has been actively promoting domestic electronics manufacturing so as to boost the economy and create new job opportunities. On one hand, the Indian government has instituted a more restrictive tariff policy to force the localization of the supply chain. On the other hand, it is offering incentives to international smartphone brands so that they will expand the share of local device production. According to local news, people from the more affluent middle and upper classes are being hit the hardest by the second wave. This development will directly impact the country’s smartphone market in 2Q21 by weakening domestic consumer demand and in turn causing a drop in the ASP of smartphones. Smartphone brands are therefore expected to closely monitor their inventories of whole devices and adjust their subsequent production plans accordingly.

The top four smartphone brands in India, which are Xiaomi, OPPO, Samsung, and Vivo, with respective market shares of 25%, 23%, 22%, and 16%, collectively account for about 86% of the country’s total sales. As these brands primarily focus on the US$100-$250 product segment, the worsening pandemic has had an impact on all of them. With regards to manufacturing operations, most factories are reportedly operating normally without being disrupted by the pandemic. However, the accelerated spread of the coronavirus may adversely affect the lower and middle classes, who comprise the vast majority of the labor force. Should the health crisis in India remain unaddressed, TrendForce believes that the country’s import/export operations may come to a standstill as a result, and transportation of key smartphone components may also be disrupted.

On the whole, if the pandemic were to remain uncontained in India throughout 2Q21, then the country’s economic outlook for 2H21 would likely be less than optimistic, and there would be a further reduction in global smartphone production for the year. If these developments were to take place, then TrendForce proposes a “bear case scenario” in which the global smartphone production for the year increases by less than 8% YoY.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

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