Chipset shortage hitting smartphone industry hard, says Counterpoint

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The ongoing semiconductor shortage is impacting the smartphone industry hard, according to research firm Counterpoint Research, which has predicted lower shipments for the second half of 2021. According to the data, Counterpoint now expects the smartphone shipments to stand at 1.4 billion for 2021, which is around 6 per cent growth, compared to the earlier forecast of 9 per cent annual growth.

“The semiconductor shortage seems to affect all brands in the ecosystems. Samsung, Oppo, Xiaomi have all been affected and we are lowering our forecasts. But Apple seems to be the most resilient and least affected by the AP shortage situation,” Tom Kang, Research Director at Counterpoint Research said in a press statement.

The research firm notes that the ongoing chipset shortage has impacted the smartphone industry negatively, reversing earlier predictions had pegged the market for a strong rebound after COVID-19 and 2020.

According to Counterpoint, while vendors had placed large component orders from the end of last year, some OEMs and vendors are reporting they had only received 80 per cent of their requested volumes on key components during the second quarter of 2021. The research firm says the situation will get worse in the third quarter, and ahead of the festive season the demand is expected to go up.

Data shows that 90 per cent of the industry is affected by this supply chain constraint. According to Counterpoint, the smartphone industry so far avoided the problems caused by semiconductor shortage thanks to planning for parts and order placing along with hoarding of certain components like Application Processors (AP) and camera sensor. But given the shortage has continued, the smartphone industry is now impacted.

With regard to application he shortage was triggered by low yield rates in newly established fab lines. AP vendors like Qualcomm and Mediatek rely on these foundries and manufacturing problems result in fewer processors supplied which in turn affects smartphone OEMs,” explains Counterpoint.


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