Semiconductor Component Suppliers Eyeing Demand From China 5G Smartphone Sector

Despite the fact that China’s smartphone market is shrinking, Taiwan’s semiconductor component suppliers still see a silver lining in the horizon as Chinese smartphone vendors are gearing up efforts to develop 5G-enabled models, according to industry sources.

China’s smartphone market is unlikely to see growth in 2019, with the posisbility of a single-digit decline, but its vendors are keen to roll out 5G models, driven by their government’s push for commercial operations of 5G networks to maintain leadership in the next-generation communication technology, said the sources.

In line with the government’s policy, Huawei has so far had the highest number of 5G-focused models being verified, as fellow brands including Xiaomi, Oppo and Vivo are gearing up related developments.

IC backend service firms ASE Technology Holding and Sigurd Microelectronics, and IC testing solution providers Chunghwa Precision Test Tech (CHPT) and Keystrone Microtech have benefited from Huawei’s move. VCSEL, PA (power amplifier) and RF component suppliers are also expected to enjoy bullish orders in the third quarter, indicated the sources.

Sales of smartphones in China totaled 186 million units in the first half of 2019, down 5.1% on year, with 4G models accounting for 95% of the shipments. Among them, sales generated by local brands reached 172 million units, down 1.8%, according to market data.―Digitimes