TrendForce


2022-04-21

Smartphone Shipments in Africa Estimated at Approximately 107 Million Units in 2022, led by TECNO, a Transsion Holdings Brand

Although the global smartphone market is becoming increasingly saturated, it is still worth looking forward to demand in emerging markets such as Southeast Asia and Africa when caught in an environment with limited momentum. . Due to the recent expansion of infrastructure construction in Africa, the regional smartphone market has the opportunity to replicate the prior development path of Thailand, Vietnam, and Indonesia. TrendForce forecasts total smartphone shipments in Africa to reach approximately 107 million units in 2022. Sub-Saharan Africa, which accounts for 78% of Africa’s total population, holds the greatest potential and countries such as Nigeria, Ghana, Senegal, and Tanzania are worthy of attention.

Taking the Sahara Desert as a natural barrier, North Africa cleaves closer to Europe and the Middle East, modernizing earlier, and possessing higher GDP per capita and relatively greater spending power. Looking at Egypt, its mainstream smartphone brands in 2021 were Samsung, OPPO, and Xiaomi. As for Africa south of the Sahara, taking Nigeria as an example, mainstream brands are TECNO, Infinix, and Itel, which is very different from the Egyptian market. TECNO, Infinix, and Itel are owned by Transsion Holdings of China and, in terms of the overall African smartphone market, Transsion Holdings is already dominant. These three brands captured an estimated combined market share of approximately 52% in 2021, eclipsing Samsung’s 15%.

TrendForce believes that mainstream mobile phone brands in Africa are very different from markets in Europe, North America, and East Asia and are mainly influenced by factors such as local spending power, communication services, and user needs, while mobile phone pricing is undoubtedly the decisive factor. For example, approximately 60% of smartphones sold in Egypt are priced between $100 and $200. While in sub-Saharan Africa, excluding a few countries with high GDP per capita such as Gabon and South Africa, most smartphones are sold at below US$100 in the market. However, from the perspective of mainstream global smartphone brands, the price of low-end smartphones is still higher than US$160 which remains quite unaffordable for the majority of local consumers. This pricing gap gives TECNO, Infinix, and Itel more room to operate.

In addition, the reason Transsion Holdings’ brands can dominate the African smartphone market includes many localized marketing strategies in addition to price factors. For example, cleaving close to local consumption habits, setting up physical sales locations, launching models that support 4 sim cards to meet the needs of users with multiple phone numbers, or installing large-capacity batteries in low-end mobile phones to reduce the inconvenience of frequent searches for charging stations, all of which help to enhance the competitive strength of the Transsion brand. Transsion Holdings is expected to continue leading the African market from 2022 to 2025.

(Image credit: Unsplash)

2022-04-19

Global Proportion of Installed Lithium Iron Phosphate Battery Capacity Expected to Reach 60% in 2024, Becoming Mainstream of Power Battery Market, Says TrendForce

As a consequence of rising power battery raw material prices, a number of global new energy vehicle (NEV) brands including Tesla, BYD, NIO, Li Auto, and Volkswagen, have successively raised the sales prices of electric vehicles (EV) in 1Q22. TrendForce believes that power batteries are the core component that account for the greatest portion of an EV’s overall cost and reducing the cost of power batteries will be an important strategy for companies to remain competitive in the future. As technology continues to innovate, lithium iron phosphate batteries are expected to account for more than 60% of installed capacity in the global power battery market by 2024.

TrendForce indicates, from the perspective of the world’s largest EV market, China, the power battery market reversed in 2021 and lithium iron phosphate batteries officially surpassed ternary batteries with 52% of installed capacity. Lithium iron phosphate installed capacity continued to grow in 1Q22, rising to 58%, and demonstrating a growth rate far beyond that of ternary batteries. However, from the perspective of the global EV market, thanks to the increase in the penetration rate of NEVs in Europe and the United States, ternary batteries still accounted for a market share of more than 60% in 2021, far exceeding that of lithium iron phosphate batteries, which captured a market share of approximately 32~ 36%.

Although the current gap between these two materials remains substantial, according to production capacity planning of global new energy battery cathode material manufacturers in the past two years, the scale and speed of lithium iron phosphate materials expansion will far exceed that of ternary materials. According to TrendForce investigations, planned expansion projects announced by global cathode material manufacturers are currently concentrated in China and South Korea, with a nominal total planned production capacity of over 11 million tons, of which planned production capacity of lithium iron phosphate cathodes accounts for approximately 64%. However, since planned production capacity exceeds market demand, there will be a certain shortfall between the industry’s total planned production capacity and actual future production capacity. It remains to be seen to what level actual effective production capacity can rise in the future.

It is worth noting, as the price of core battery raw materials such as lithium, cobalt, and nickel has moved up clearly since 2H21 and the global power battery supply chain is plagued by uncertainty including the Russian-Ukrainian war and the global pandemic, there will be a short-term disparity between the growth rate of supply and demand and companies will focus more on reducing the cost of battery materials and supply chain security, two major issues related to future competitiveness. As a result of this trend, TrendForce expects the cost-effective advantage of lithium iron phosphate batteries to become more prominent and this type of battery has an opportunity to become the mainstream of the terminal market in the next 2-3 years. The global installed capacity ratio of lithium iron phosphate batteries to ternary batteries will also move from 3:7 to 6:4 in 2024

2022-04-13

Supply Spikes Sharply, TV Panel Shipments Forecast to Reach 281 million in 2022

TrendForce’s research shows that material shortages, logistical delays, and relief subsidies for the American people not only supported global TV panel shipments in 1H21, but also drove an extended rise in quotations. However, as end product inventory climbed, stocking momentum fell rapidly in 2H21, not only inducing a sluggish peak season, but also bringing about a 1H22:2H22 shipment ratio that deviated from historical precedent. Shipment volume was not the only performance statistic to fluctuate in 2021. Originally planned factory closures were also delayed due to market demand, again transforming the entire industry landscape.

Looking forward to 2022, the global display production capacity of large generational fabs in 2022 will continue to grow through OLED production capacity generated by Korean panel manufacturers, the extension of LCD production, and continuing injection of maximum production capacity into the market from certain LCD production lines originating from panel manufacturers in other regions. Thus, overall TV panel supply is expected to spike dramatically. Although demand in emerging markets has recovered, TV panel quotations are also more prone to manipulation by branded panel companies than in 2021. A certain amount of momentum is expected in the end market for the stocking of TV panels. However, considering continually rising shipping and logistics costs, the unresolved global inflation issue, and life gradually returning to normal will inhibit the shipment performance of TV sets, demand for panels will also see an impact.

Therefore, after considering a number of factors, TrendForce expects global TV panel shipments to reach 281 million units in 2022, with an annual growth rate of 4.3%. As panel makers continue to implement a strategy of increasing panel size and overall shipments increase, positive growth is expected in size of shipped area.

The current global Gen5 and above large generational fab LCD panel supply and demand model shows that the growth rate of demand area cannot keep up with the growth rate of supply area and the shortfall between supply and demand in 2022 will be larger than that in 2021, which also suggests that panel manufacturers will meet tougher challenges in 2022. It is worth mentioning that there are still several key factors to be observed in 2022. For example, the closing schedule of LCD production lines at Korean panel factories, the adjustment of TV and IT panel capacity allocation, and the impact of the pandemic and war on whole device demand and component supply will all be key indicators of display industry trends leading into 2022.

(Image credit: Samsung

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)

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