According to research of the Taipei-based Market Intelligence & Consulting Institute (MIC) conducted as part of the ITIS project, Taiwanese Smartphone application IC market volume reached 89.37 million units in the second quarter of 2009, up 33.9% sequentially. Taiwanese Smartphone application IC market value reached US$464.8 million in the second quarter of 2009, growing 33.7%. Since the global financial crisis emerged in the second half of 2008, international brand-name Smartphone vendors have been conservative in their outlook. Therefore, they purposely lowered product inventory levels, in some cases to levels of less than one week. However, with the economy showing signs of recovery and anticipating that customer demand will rebound, these vendors have started to increase procurement from upstream chip suppliers to inventory levels of a sufficient number of weeks; they have also started to aggressively stock materials to meet demand in the peak-season in the second half of the year. Furthermore, the rollout of the Apple iPhone 3GS has also contributed large chip orders.
In Taiwanese Smartphone baseband processor and transceiver market volume, the HSPA share of the total volume increased to 89.7% in the second quarter of 2009. The GSM / GPRS / EDGE share in these markets declined considerably to 1.2%. According to MIC Industry Analyst Edward Lin, "the shipment of new terminal products, such as the Apple iPhone 3GS and HTC's Magic, Diamond2 and Pro2, benefited HSPA IC volume. EDGE IC volume declined, as production of value-line models that were launched in the second half of 2008 was halted. Therefore, the shift of mainstream Smartphone specifications towards 3G and higher (HSPA) is continuing." With the major supplier TI phasing out its baseband IC business, the market scale of EDGE ICs continues to decline.
As for CDMA (including EV-DO) baseband and RF chips, their share of the Taiwanese market volume increased to 8.8% in the second quarter. "These ICs mainly benefited from the start of mass production of the Palm Pre. With shipment volume of the Palm Pre expected to increase in the second half of 2009 and CDMA versions of several new HTC models hitting the market, CDMA IC sales are expected to remain stable", said Mr. Lin.
The Taiwanese Smartphone application IC market in the third quarter of 2009 is expected to feature a situation of several suppliers performing strongly and several suppliers performing weaker than others. As for Infineon and Samsung, which respectively supply baseband and AP for the Apple iPhone series, as iPhone 3G and iPhone 3GS sales are expected to continue to be strong in the third quarter, Apple's assembly partner Foxconn is expected to continue releasing orders. Meanwhile, the Palm Pre, which is also assembled by Foxconn, is expected to have strong shipments in the second half of the year. The major AP supplier for this model TI (OMAP3430) is expected to experience a significant increase in its market share.
Regarding Qualcomm, originally its main client HTC had a strong forecast for its operations in the second half of 2009 and planned to purchase large amounts from Qualcomm. However, market demand for Android products has not been as strong as expected. Furthermore, other major brands such as Nokia, Samsung and LG are also aggressively developing their Smartphone business. As a result, Qualcomm has been forced to lower its shipment forecast for the third quarter. The company's current material inventory levels are too high. It is expected that Qualcomm's share of the Taiwanese market in the third quarter of 2009 will be similar to the second quarter. The company's performance is expected to improve in the fourth quarter of 2009 with the traditional peak season.
More information can be found in the following MIC report: The Taiwanese Smartphone Application IC Market, 3Q 2009
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Market Intelligence & Consulting Institute (MIC), based in Taipei, Taiwan, was founded in 1987. MIC is Taiwan's premier IT industry research and consulting firm providing intelligence, in-depth analysis, and strategic consulting services on global IT product and technology trends, focusing on markets and industries in Asia-Pacific. MIC is part of the Institute for Information Industry. https://mic.iii.org.tw/english
The Industry and Technology Intelligence Services (ITIS) project is managed by the Department of Industrial Technology of Taiwan's Ministry of Economic Affairs. As part of the project, research is conducted in a variety of fields, including the ICT sector. The project serves both the public and private sector.