Smart watch shipments reached 107 million units in 2021, surpassing the shipments of smart bands for the first time. Smart bands declined in 2021 with only 70.33 million units delivered. As branded manufacturers strengthen their investment in the smart watch market, market growth has accelerated. Due to the proximity of functional applications, the smart band market has been gradually supplanted by low-cost smart watch products. Therefore, driven by new products in 2022, the current forecast indicates that smart watch shipments will continue to grow in 2022, reaching 119 million units, for an annual growth rate of 11.4%. Smart band shipments are expected to decline to 55.18 million units and the gap between the two continues to widen. It is worth noting, although branded manufacturers are optimistic regarding the development of the smart watch market, in light of risks such as the COVID-19 pandemic, war, and inflation, continuing downward revisions of smart watch shipment volume in 2022 cannot be ruled out and annual growth rate may even fall below 5%.
The top five major manufacturers of smart watches are Apple, Samsung, Huawei, Xiaomi, and Garmin with a combined market share of 63%. Apple Watch shipments reached 36.6 million units in 2021, with an annual growth rate of 20%. Apple is optimistic regarding the market in 2022. On the one hand, the company believes that the Watch Series 8 can maintain the same consumer interest as the Watch Series 7. On the other hand, a wave of entry-level product replacements is expected with the launch of the second-generation Watch SE. Coupled with the launch of new Pro products, Apple believes that market demand in 2022 will surpass that in 2021 and shipment volume is expected to reach 43 million to 46 million units.
However, considering the negative economic impacts following the wake of the COVID-19 pandemic and inflation, 4Q22 holiday sales may not pan out as expected. Throwing in the wildcard of China’s lockdown strategy, production of new Apple Watches may be affected if lockdown measures reappear in 2H22, which will lead to a risk of further delays in shipments of new products, upsetting shipments in 2022. Therefore, shipments of Apple Watches are conservatively forecast to reach 39.1 million units in 2022.
Although Samsung began exploring the wearable device market very early, due to the small market size and the rapid growth of the smartphone market, smart watches were not the focus of Samsung’s product development at the time. This was true up until recent years. As the growth of smartphones slowed, Samsung has once again strengthened its distribution of other consumer electronics products which has led to continuous growth in Samsung Galaxy Watch shipments. In addition, since Huawei has been flattened by Sino-US trade friction, Samsung leaped to claim the number two spot in the smart watch market in 2021. Samsung smartwatch shipments are estimated to grow from 11.09 million in 2021 to 14.1 million units in 2022.
After Google officially acquired Fitbit, although Fitbit remains nominally an independent brand, internal reorganization is bound to be carried out considering this affords more efficient resource allocation, integrating the companies’ procurement, product development, etc. Google will have two smart watch brands, Fitbit and Pixel. In terms of high-end watches, the Pixel Watch is a flagship product positioned as an extension of the Pixel mobile phone and is primarily used in synergy with smart phone functionality. Therefore, the Pixel Watch uses the Samsung Exynos chip and it is expected to highlight the features of various apps in the Google Play Store. Since Fitbit was acquired by Google, it has become necessary to adjust unified strategy and integrate and reorganize resources. Although smart watch shipments resumed growth in 2021, there is some distance between leading brands. Fitbit Is expected to launch new products in 2H22. Google Pixel Watch is also expected to be launched in 2H22, so Google/Fitbit smart watch shipments are estimated to grow to 3.65 million units in 2022.
Shipments of e-sports LCD monitors is expected to come in at 23.2 million units in 2022, with an annual growth rate of only 2%. Although branded and panel manufacturers are still actively promoting e-sports monitors, the Russian-Ukrainian war began to affect overall European consumer market demand starting in February 2022. After 2Q22, Europe was clearly hit hard by inflation and demand for consumer electronics products shrank sharply, steadily eroding e-sports LCD monitors sales. If sales in peak season 4Q22 are disappointing, gaming LCDs may not be able to maintain their growth momentum and will face the first year in which shipments declined.
Strictly control costs and inventory to maintain profitability and competitiveness
At present, there is no shortage of materials for e-sports LCD monitors and panel prices are falling month by month. Transit time was shortened by 2 to 3 weeks in 2Q22. In addition to sluggish consumer demand in Europe, product sales have slowed. Demand in 2H22 will also feel the heat of interest rate hikes in the United States. Therefore, branded manufacturers must clear their high-priced inventories in the shortest possible time and reduce the inventory levels of panels and whole devices as soon as possible to curb ballooning losses precipitated by cratering prices.
M-type development of e-sports products to increase product penetration
Looking forward to shipments of e-sports LCD monitors in 2023, e-sports merchandise is expected to remain a key product in continuous development at major branded manufacturers. However, overall market size will stagnate in 2023. Considering the limited market, manufacturers must raise the value of their products. E-sports products need M-type development if they wish to grow despite trends.
Firstly, is parity of low-end gaming products, such as narrowing the price gap between gaming products and standard products or reducing specifications and cost to replace prior 60Hz products with 100Hz products. Development of high-end e-sports products with higher resolution and higher refresh rates or new technologies such as QD-OLED, OLED, and Mini-LED should continue in order to improve and optimize said products and enhance the consumer experience. Hopefully, consumers will prioritize e-sports products when purchasing LCD monitors and its market share will continue to expand.
Although the overall economy is unstable, the use of automotive MCUs is still increasing gradually due to electric and smart vehicle trends. In order to meet market demand, IDMs have strengthened their investment in production resources. There will also be volume and price growth in 2022. Overall market size is estimated to reach US$8.58 billion, with an annual growth rate of 25.7%.
Automotive MCU market dominated by major international IDMs, 32-bit penetration rate will reach 80.1% in 2022
NXP, Renesas, and Infineon account for approximately 70% of global automotive MCU market share. In 2022, NXP will focus on the development of its S32 series and presented a S32M test chip featuring TSMC’s 5nm process, symbolizing a major milestone in the development of automotive chips. Renesas is focusing on its RH850 series, supplemented by the Low Power RL78 to stabilize development. Infineon’s automotive MCU development is focused on its AURIX series which features a self-developed TriCore core and is designed to perform mid-to-high-level automotive system control.
In general, major international IDMs have a complete line of automotive MCUs. With the increasing number of automotive functions, requirements for MCU computing power have advanced. Considering the optimization of major manufacturers’ product portfolios, the penetration rate of 32-Bit MCUs will also increase year by year and is forecast to grow to 80.1% in 2022.
Nuvoton ranks among top ten MCUs producers worldwide, Taiwanese manufacturers’ operations suffer headwinds after tide of shortages recedes
Taiwanese MCU manufacturers are represented by Nuvoton, Holtek, and Sonix. There are other manufacturers such as Generalplus, Nyquest, Hycon, and Megawin but their revenue scale is small and proportion of MCU is low. Overall, only Nuvoton is an IDM with a MCU market share ranked among the top ten in the world and readily available automotive MCU products.
Taiwanese manufacturers mainly focus on mid-to-low-end consumer electronics applications with low barriers to entry. Most of them are fabless manufacturers, meaning the barriers to entry for capital are also low. Therefore, it is difficult to compare their product portfolios with major international manufacturers. After the shortage of semiconductors subsided, operation in 1H22 inevitably encountered headwinds and demand for consumer electronics in 2H22 will continue to be weak, signaling the arrival of a cold winter for the consumer MCU market.
Chinese smartphone brands such as Xiaomi, OPPO, and Vivo all have their own production lines. In recent years, these brands have accelerated their overseas deployment due to rising labor costs in China, growing geopolitical risk factors, and the spread of the COVID-19 pandemic. Not only will Xiaomi produce mobile phones in Vietnam, but the company will also continue to expand production lines in India and Indonesia in the coming years. OPPO has also set up factories in countries including India, Indonesia, and Turkey to meet the needs of neighboring markets. Vivo has successively set up factories in India, Bangladesh, and Indonesia, and initiated its production lines in Turkey and Pakistan in 2021. Since current trends have the Chinese market declining more than the global market, OPPO and Vivo’s proportion of overseas production capacity is expected to increase gradually. As for Xiaomi, which has always been active in overseas markets, the company will continue to expand its production capacity in India and Vietnam.
Xiaomi’s achievements in expanding overseas markets are most outstanding, OPPO following suit, Vivo rushing to catch up
From the perspective of Chinese brands, Xiaomi has been deeply involved in overseas markets for many years. Its overseas revenue was only RMB9.1 billion in 2016, but by 2018, overseas revenue had exceeded RMB70 billion. Xiaomi currently has a market share varying between 10 and 25% in Europe, India, Indonesia, Vietnam, and the Philippines. On the other hand, OPPO has been tackling overseas markets aggressively since 2018, and currently has a market share between 10-15% in India, Pakistan, Indonesia, Vietnam, and the Philippines. As for Vivo’s late start, its market share in India, Pakistan, and the Philippines is approximately 10-15%.
If the overall market is divided into the Chinese market and the non-Chinese market, shipments from Xiaomi, OPPO, and Vivo to the non-Chinese market are estimated to account for 74%, 66%, and 46% of total shipments, respectively, in 2021. Since China’s smartphone shipments may decrease by 16% in 2022, and recovery is limited in the short term, Xiaomi, OPPO, and Vivo are expected to focus more on overseas markets in the future and the proportion of non-Chinese market shipments is expected to increase further.
According to TrendForce, the global quantum computing market was valued at US$470 million in 2021, an increase of 16.7% compared to 2020. This market is mainly led by China and the United States, driving global quantum computing and its technological progress, especially in upper-layer software. In terms of algorithmic speed, small-scale problems have been put to the test through experimentation. The market is expected to reach US$580 million in 2022, with an annual growth rate of approximately 18.8%, and current growth rate expanding every year until 2027.
According to TrendForce, as stated in the Chinese government’s plan for software and information technology services, its quantum technology policy will be further implemented from a national level to departments including national defense, industry, and technology and more targeted policies will be released through tiered departmental levels such as for AI, quantum information technology, biotechnology, semiconductors, and autonomous systems. To this end, the Chinese government is establishing relevant laboratories in Beijing, Shanghai, and Hefei to promote the rapid development of quantum technology and quantum computing cloud platforms.
When China launched its “Five-Year Plan” in 2006 to promote economic and industrial development, it also focused on the development of quantum science and technological breakthroughs, as well as the deeply integrated development and application of quantum computing in emerging technologies such as AI, edge computing, big data, IoT, and cloud such as advanced space quantum communication technology and quantum computing combined with AI/ML, IoT, and cloud, providing assistance to the Chinese Academy of Sciences’ quantum satellites, the University of Science and Technology of China’s quantum computer, and other quantum processors to achieve breakthroughs in technology and functional characteristics. Therefore, the cumulative investment in China’s quantum field is estimated to reach US$15 billion in 2022.
Main applications of China’s quantum computing market
Considering the immense size, extremely harsh operating environment, and high price of quantum computers, quantum computing applications are rapidly developing towards cloud platforms. Therefore, research on quantum computers primarily focus on four types of applications: simulation, optimization, cryptography, and machine learning. “Simulation” is most used in processes that occur in nature such as weather forecasting, mid- and long-term climate deductions, and polar climate change. It is also widely used in fluid mechanics, drug discovery, battery design, and high-frequency trading, derivatives, and options pricing in the financial industry.
“Optimization” is the use of quantum algorithms to determine the best solution among a set of feasible options and is mostly used for risk management in traffic arteries, logistics, self-driving navigation systems, and financial investment portfolios. “Machine learning” is used to identify patterns in data and statistics, enhance the training of machine learning algorithms, accelerate AI development, and introduced to self-driving cars and financial systems to prevent fraud and money laundering.
As enumerated above, the scope of quantum computing applications is gradually expanding, covering fields including supply chain, finance, transportation, logistics, pharmaceuticals, chemicals, automobiles, aviation, energy, and meteorology. Sectors such as pharmaceuticals, chemicals, and new materials use quantum operations to analogize molecular properties, directly analyze and obtain large molecular properties through a computerized digital format, shorten the time for theoretical verification, and thereby accelerating drug research and development and the development of new materials.
In the automotive field, in order to accelerate the promotion of electrification strategies, major carmakers have applied quantum computing to chemical analogies and are committed to developing batteries with better performance. In the aerospace field, quantum computing is used to solve some of the most difficult challenges facing the aviation industry, from basic materials, product research and development, machine learning optimization, to complex system optimization, and are even changing the way aircraft are made and fly.