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2022-04-13

Market Share of Smartphones Supporting Wi-Fi 6 and 6E Expected to Exceed 80% in 2025, Says TrendForce

Wi-Fi 6E was commercialized in 2021 and, in addition to supporting the 5 GHz and 2.4 GHz bands, it can also operate in the 6 GHz band. According to TrendForce research, Wi-Fi 6E is designed to reduce network congestion and interference through more numerous, wider, and non-overlapping channels (transmission channels for signals in communication systems), while Wi-Fi 6 and 6E’s regular wake-up mechanism (Target Wake Time) effectively coordinates network traffic and maximizes the battery life of smartphones. By 2025, the market share of smartphones supporting Wi-Fi 6 and 6E is estimated to surpass 80%.

TrendForce further indicates that the market share of Wi-Fi 6 and 6E will reach 58% in 2022, officially surpassing Wi-Fi 5 technology. This adoption is primarily driven by the fact that countries such as the United States, Britain, Germany, France, South Korea, Japan, and Taiwan have already used the 6GHz frequency band for Wi-Fi technology, as well as the support from the two major mobile phone camps, iOS and Android, and the active deployment of related industrial chains.

In addition, since high-quality Wi-Fi in devices such as mobile phones, laptops, tablets and wireless access bridges (Access Point) require more efficient and reliable connection requirements and video, telemedicine, and navigation systems require larger bandwidth, the demand for lower latency is driving growth in connected traffic, in addition to the greater amount of automotive, IoT, and AR/VR solutions expected to enter the consumer market this year.

At the same time, Wi-Fi technology is also expanding into the commercial, industrial, and household sectors with the largest growth coming in the demand for smart home and smart lighting. Shipments of Wi-Fi-based smart home equipment will grow at a CAGR of 18% from 2021-2026, connecting home devices through Wi-Fi into a core home network and driving applications such as AR/VR, cloud gaming, 4K video conferencing and 8K streaming media. The continuous development of smart home networking technology has further bolstered the promotion of smart lighting connectivity. The appeal of smart lighting is convenience, safety, and energy efficiency. Currently, voice assistants such as Alexa, Cortana, and Siri can synchronize with smart lighting applications and enable voice commands to control functions such as the light switch, brightness, and color tone. Thus, smart lighting can also be used outside the home in factories, offices, and even outdoors.

2022-04-13

[Russia-Ukraine] Repercussions of Russian-Ukrainian War Lingers, Global TV Shipments Revised Downward to 215 Million Units in 2022

TV shipment performance in 2022 will return to a pre-pandemic cycle but the Russian-Ukrainian war has indirectly led to rising inflation. With consumer spending unchanged, expenditures on non-essentials are bound to feel the squeeze. Russia accounts for 82% of TV shipments in the CIS (Commonwealth of Independent States) region and Ukraine also maintains a 12% market share. As the war drags on, the region will bleed 1.5 to 2 million TV sets in the short term, and TV shipments may fall by more than 3 million sets in the medium term. Although demand in the CIS region is not positive, Southeast Asia and emerging markets were severely affected by the COVID-19 pandemic in 2021, deferring a portion of demand. Overall, TV shipments in 2022 will adjust downward to 215 million units, or 2.4% YoY and a decrease of 0.7% from the previous 2022 forecast.

According to TrendForce statistics, TV shipments in the CIS region account for 4% of the global total, of which 60% consists of 32-inch and 43-inch models. The two major TV brands, Samsung and LG, account for nearly 50% of the combined market in the CIS region. At present, due to factors such as geopolitics and economic sanctions, shipments to Russian factories for back-end TV assembly have been halted and Samsung has gone one step further by halting sales.

Samsung and LGE account for more than 50% of CIS region market share, hardest hit by the Russian-Ukrainian war

Russian demand for TV sets falls at 6-7 million units per year. Due to high tariffs, TV giants Samsung and LGE have been encouraged to set up TV assembly plants in Russia which, not only reduce tariff costs, but also enjoy the benefits of zero-tariff exports to Ukraine.

Samsung and LGE originally sent imports from South Korea to Russia in the form of CKD (Complete knock down) in order to assemble TV sets in local factories and enjoy duty-free benefits. However, the war has suspended all shipments to Russia.

It is worth mentioning, as damage has been dealt to the two Korean brands, Chinese brand Haier has chosen to accelerate its deployment in the Russian market. Haier is expected to successfully occupy third place in TV sales in the CIS region with a market share of 11% in 2022. In 2021 Haier’s shipments in the CIS region reached 800,000 units. In 2022, it has an opportunity to cannibalize lost market share from Korean brands with a shipment target of one million units. Judging from the TV production capacity of local factories, volume maxes out at 2 million units. Haier is forecast to become the biggest winner of the Russian-Ukrainian war.

Soaring shipping costs portend possible further downgrade of 2022 TV shipments

Due to factors such as reduced shipments and inventory control, the two Korean brands have gradually adjusted their purchase volume of TV panels in the near term, relegating 32- and 43-inch TV panels, units that had an opportunity to increase in price in April 2022, to a downward price trend again. Due to falling demand for TVs and IT, concerns over panel overcapacity are overwhelming and some panel manufacturers have decided to begin gradual capacity adjustment in April 2022.

Of the challenges plaguing the TV market in 2022, in addition to the existing problem of the COVID-19 pandemic, the Russian-Ukrainian war and rising global inflation also add variables to demand. In addition, cargo container shortages and port congestion increased shipping costs significantly in 2021, indirectly inflating the cost of TV sets with costs rising as TV sizes grow. Even though current panel pricing has dropped by 30% to 40% compared with its high point in 2021, no expected reduction in freight costs in 2022 will inevitably affect the scale of branded promotions and stocking during the peak season of overseas markets in 2H22. Therefore, there is still room for TV shipments in 2022 to be revised downward.

(Image credit: iStock)

2022-04-12

Shanghai and Kunshan Pandemic Lockdowns Clog Supply Chain Logistics, Exacerbates Component Mismatch in ODMs, Says TrendForce

Due to the explosion of the COVID-19 pandemic in China, Shanghai has adopted a rolling lockdown policy since March and Kunshan City, a major production hub for the electronics industry near Shanghai, has also felt the impact. According to TrendForce, limited manpower and logistics and suspended transportation options mean neighboring OEMs and ODMs can only rely on onsite inventory to barely meet the needs of production lines, further exacerbating component mismatches. Concurrently, a short-term surge in finished product shipments and demand for material replenishment after the various lockdowns are lifted may gridlock customs authorities, with delivery delays potentially lasting until the end of April before there is any chance for improvement.

TrendForce further indicates, starting from 4Q21, demand for consumer specification products, which account for the bulk of products sold by MLCC suppliers in Taiwan, Korea and China, weakened as customers continue to adjust their inventories. Although ODMs currently predict the demand for consumer specification MLCC will recover month by month in 2Q22, emergency lockdowns caused by the pandemic are bound to impose delays on logistics. Likewise, OEMs’ supply of key direct buy components will also be interrupted due to the Shanghai lockdown.  Shortages of CPU, battery module, and panel materials will impact production lines because materials cannot be delivered to relevant factory warehouses, exacerbating ODM component mismatch issues. On the other hand, the focus of downstream branded customers remains on low visibility and weak demand in the 2Q22 end market.

MCLL supplier production centers in China including those located in Tianjin, Suzhou, Wuxi, and Guangdong, have yet to be locked down but inter-provincial logistics and transportation have clearly felt the escalation of inspection and supervision since the end of March, resulting in prolonged transportation timetables. However, the biggest problem for MLCC suppliers at this stage is they cannot deliver materials to Shanghai and Kunshan. There are a number of large ODM plants at these two locations, such as Quanta Shanghai Manufacture City in the Songjiang District of Shanghai and the Compal, Wistron, and Pegatron campuses in Kunshan. At present, ODMs’ average inventory level for consumer specification products sits at 3 to 4 weeks, which is sufficient to meet the needs of short-term production. However, stocks of certain high-voltage automotive MLCC of 250V or higher specifications and high-end server MLCC size 0805/1206/1210 items may be in danger of depletion.

Looking to 2Q22, the lockdowns of Shenzhen, Dongguan, and Shanghai that began in March have hobbled China’s manufacturing industry and sent it into a period of contraction. In addition, the Russian-Ukrainian war and rising inflation continue to slow demand growth for mainstream consumer electronics, potentially risking recession. With so many unfavorable factors, ODMs must still observe an easing of component mismatching before further considering MLCC stocking momentum after restrictions are lifted. If the pandemic in China cannot be effectively brought under control in the short term, overall ODM inventories will continue to be maintained at a high level for approximately 1 to 1.5 months to prevent similar sudden lockdowns disrupting operations. However, TrendForce believes that it will be difficult for MLCC suppliers to surmise the visibility of customers’ real demand. Once the purchase order situation reverses, they will be unable to respond quickly with capacity adjustments, thus becoming a primary focus of MLCC manufacturers’ risk management in 2Q22.

2022-04-11

Demand for Consumer Electronics Weak, Supply Chain Shortages Ease in 1H22, Says TrendForce

According to TrendForce, the consumer electronics market will feel the brunt of the weakening stay-at-home economy, the pandemic in China, international tensions, and rising inflation in 1H22. Coupled with the traditional off-season, demand for relevant applications such as PCs, laptops, TVs, and smartphones has cooled significantly and downstream customers have successively downgraded their shipment targets for the year, while demand for automotive, Internet of Things, communications, and servers products remain good. At the same time, the supply chain will build higher inventories in general to mitigate the risk of material shortages due to transportation impediments induced by the spread of the pandemic and the ongoing war between Russia and Ukraine.

1. Foundries

Due to the prolonged lead-time of semiconductor equipment and limited new capacity in 1Q22, the overall foundry capacity utilization rate remains fully loaded, in particular, component mismatch issues continue for parts produced at mature nodes (1Xnm~180nm). Looking forward to the second quarter, although growth in global wafer production capacity remains limited, due to weak demand for end products, continuing international tension, and China’s forced lockdowns and supervision due to the recent spread of the pandemic, there is an opportunity for the supply chain to obtain a more adequate supply of wafers that were previously squeezed by production capacity.

2. Servers

The overall supply of key server materials improved slightly in 1Q22. In addition, due to increasing orders from ultra-large data centers, the general supply cycle of NetCom chips such as LAN IC/chip remains as long as approximately 40 weeks but the demand gap can be bridged by instituting urgent order fees, mitigating actual impact. As the aforementioned situation eases, additional orders for ODM motherboard production are moving briskly, prompting continued stocking of FPGAs and PMICs materials. NetCom chips are also overstocked and the overall market has a reached a “rich get richer” mindset. Material shortages at second-tier ODMs still stifle the production of motherboards for a small number of customers but does not affect the overall server market supply. With improvements in material supply, server shipments will increase significantly in 2Q22, growing an estimated 15.8% QoQ to 3.6 million units.

3. Smartphones

Affected by sluggish seasonal demand, the Russian-Ukrainian war, and rising inflation, market demand has cooled. Thus, material delivery issues in the supply chain have eased compared to 2H21. Although there is still a shortage of certain components, most of these shortages are concentrated in mid/low-end smartphone products. The lead time for 4G and low-end 5G SoCs is approximately 30 to 40 weeks, which is limited by production capacity planning. Since last year, the demand of the mid/low-end mobile phone market has not been met. This is followed by A+G sensors with a lead time of approximately 32~36 weeks and OLED DDIC and Touch IC with a lead time of 20~22 weeks. The production volume of smartphones in 2Q22 will be affected by the interaction of the aforementioned factors with a forecast production volume of 323 million units, or only 6% QoQ, which is lower than the performance of previous years.

4. Notebooks

Also affected by weakening end market demand, discounting client SSDs that are no longer oversupplied, Type C IC, WiFi, and PMIC all currently boast long lead times, with Type C IC the lengthiest at 20~25 weeks. However, compared with TrendForce’s assessment at the beginning of this year, the delivery cycle has not grown longer, so the lead time of these three types of products is expected to improve by the end of 2Q22. As supply chain backlog continues to improve, shipments of notebook computers (including Chromebooks) is expected to reach approximately 55.1 million units in 2Q22, down 0.7% QoQ.

5. MLCC Passive Components

From the perspective of other key components, taking MLCC as an example, demand for major consumer electronic products such as mobile phones, laptops, tablets, and TVs declined significantly in 1Q22, resulting in high consumer product specification MLCC inventory levels held by original suppliers and channel agents and this situation may continue into 2Q22. At present, the stocking momentum for automotive and industrial MLCCs has steadily increased, while consumer specification products have yet to escape the pattern of oversupply. In 2Q22, the MLCC market has the opportunity to alleviate its component mismatch issues through gradually increased production capacity and automotive and server ICs supplied by semiconductor IDM companies, driving stocking momentum at automotive power, server, fast charging, and charging/energy storage equipment OEMs. Vehicle and industrial MLCCs have the opportunity to become primary growth drivers in 2Q22 with Murata, TDK, Taiyu and Yageo as the primary beneficiaries. Consumer specification products, which account for the bulk of MLCC production from suppliers in Taiwan, South Korea, and China, may face continued market demand weakness in 2Q22 due to a slowdown in demand for mobile phones and laptops and continuing inventory adjustment by branded companies and ODMs.

Looking forward to 2Q22, not including servers, demand for end products related to the consumer category remains weak. Components that were originally oversupplied will face more severe price tests due to the imbalance between supply and demand. In terms of materials in serious short supply, more output will be transferred to products with strong demand through the deployment of internal production capacity. TrendForce believes that from the changes in PC market conditions, it can be seen in rapid changes in demand, purchasing behavior has quickly switched from the former over-ordering strategy to actively cutting orders, inducing supply chains to buck the seasonal trends of previous years. Due to the accelerated recent spread of Omicron in China and under the country’s dynamic zero-COVID policy, mandatory and sudden lockdown and control measures may cause local manufacturers to face multiple and complex supply chain problems, which will be detrimental to market performance.

2022-04-07

Benefiting from HCL and Smart Lighting, LED Lighting Output Value to Reach US$11.1 Billion by 2026, Says TrendForce

LED

According to TrendForce’s “Global LED Industry Data Base and LED Player Movement Quarterly Update” report, demand for high-standard LED products in the lighting market will enter a growth stage. Generally speaking, the price of lighting LED products is stable. However, due to the recent rise in global raw material prices, the unit price of products looks to trend higher. Coupled with high demand for energy conservation from governments around the world, the output value of the lighting LED market in 2022 is forecast to have an opportunity to reach US$8.11 billion, or 9.2% growth YoY. In the next few years, the scale of the lighting LED market will continue growing due to the promotion of human centric lighting (HCL), smart lighting, and other factors and is expected to reach US$11.1 billion by 2026, with a compound annual growth rate (CAGR) of 8.4% from 2021 to 2026.

TrendForce further states, despite the continuing impact of the pandemic in 2022, the pervasiveness of vaccines and the recovery of economic activities coupled with the rigid demand associated with the lighting market as a daily necessity, global “carbon neutrality,” and the growing requirements of the energy conservation agenda, have moved numerous major powers to realize net-zero emissions through measures such as energy efficiency and low-carbon heating in recent years. However, lighting is a leading energy consumer in buildings, accounting for 20% to 30% of total building energy consumption. LED penetration will deepen, driven by the high demand for energy conservation and policies and regulations requiring the upgrade of aging equipment. In addition, smart lighting can also achieve the purpose of timely energy conservation. Therefore, there is strong demand for the introduction of LED lighting and smart lighting upgrades in commercial lighting, residential lighting, outdoor lighting, and industrial lighting, which further drives demand for high-standard LED products including high light efficiency, high color rendering and color saturation, low blue light HCL and smart lighting devices.

The gradual recovery of the lighting market is clearly reflected in the 2021 manufacturer revenue rankings. Lighting LED manufacturers including Samsung LED, ams OSRAM, CREE LED, Lumileds, Seoul Semiconductor, MLS, and Lightning have all posted revenue growth. MLS is still the leading manufacturer of lighting LEDs, ranking first in revenue, with an annual revenue growth rate of 34% in 2021. ams OSRAM, Lumileds, CREE LED, and Samsung LED primarily took advantage of orders for industrial, outdoor, and horticultural lighting last year, posting annual revenue growth of 26%, 18%, and 8%, respectively.

In terms of pricing, as demand in the lighting industry gradually recovered in 2021, facing demand for higher specification terminal application products and the impact of rising overall costs in raw materials and operations, LED packaging factories no longer adopted pricing strategies to capture additional market share, allowing lighting LED product pricing to stabilize and rebound in 2021. In terms of product categories, the average market price of medium and low-power lighting LED products (less than 1 watt, excluding 1 watt) such as 2835 LED, 3030 LED, and 5630 LED, posted an annual growth rate of 2.1~4.4%. For high-power lighting LED products (above 1 watt) such as ceramic substrate LEDs and 7070 LEDs, average annual market price growth was as much as 3.0~6.0%. TrendForce expects lighting LED pricing to further stabilize in 1H22.

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