Smartphone Sales Decrease
The mobile phone market is cold in the consumer market, and the weak scale growth is becoming the consensus and reality of the industry. The latest data on the global smartphone market for the full year 2022 released by the market research firm Canalys shows that global smartphone shipments for the full year 2022 will drop by 11%, to less than 1.2 billion units.
The development of the mobile phone chip industry is closely related to the prosperity of global smartphones. The coldness of smartphones in the consumer market has also made mobile phone chip suppliers feel the chill. The latest performance of the four mobile phone chip suppliers, Apple, Samsung, Qualcomm, and MediaTek, is more or less trapped by the sluggish performance of the mobile phone industry.
Mobile phone market is bleak, chip supply growth is weak
According to Apple’s first quarterly report for the 2023 fiscal year (i.e., the fourth quarter performance of the 2022 natural year), despite the most important consumer electronics shopping season at the end of the year, Apple’s financial report was lower than expected, with revenue for the period of 117.2 billion In US dollars, total revenue fell by more than 5% year-on-year, recorded the first year-on-year decline since 2019, and the largest quarterly decline in six years since 2016. EPS fell nearly 11% year-on-year, iPhone revenue fell by more than 8%, Mac revenue fell by nearly 29%, and wearable product revenue fell by more than 8%, all lower than expected.
Apple chips only supply the Apple product line. Under the background of poor terminal shipments, the shipment performance of Apple chips is naturally not good.
Qualcomm's latest financial report shows that in the first fiscal quarter ended December 25 last year, the company achieved revenue of US$9.46 billion, which was lower than analysts' expectations of US$9.6 billion, a year-on-year decrease of 12%; net profit was US$2.24 billion, a year-on-year decrease of 12%. down 34%.
It is understood that the quarterly revenue of Qualcomm's CDMA Technology (QCT) department (including smartphone chips, RF front-end components, automotive chips and Internet of Things devices) was US$7.89 billion, a year-on-year decrease of 11%. Revenue was $5.75 billion, down 18% year-over-year.
Samsung’s performance on the mobile phone side is also not as good as expected. Samsung’s financial report released on January 31 shows that Samsung Electronics’ revenue in the fourth quarter was 70.5 trillion won (about 57.2 billion U.S. dollars), a year-on-year decrease of 8%. Operating profit for the fourth quarter was 4.31 trillion won (down from a previous estimate of 5.82 trillion won), due to slower sales of MX smartphones, further declines in memory prices and valuation losses on inventory assets.
However, thanks to the business diversity of Samsung Electronics, its full-year revenue in 2022 will be 302.23 trillion won (about 245.5 billion U.S. dollars), a year-on-year increase of 8.1%, and the overall performance is not bad.
On February 3, MediaTek announced its financial report for the fourth quarter of 2022. MediaTek stated that due to the impact of customers’ inventory adjustments, the company’s gross profit margin and profitability both fell sharply in the quarter, and its net profit after tax also fell to NT$18.514 billion, a two-year low. MediaTek, in 2022 Q4, due to mobile phone customers entering the destocking stage, the revenue performance will be poor.
As the scale of revenue shrinks, the gross profit rate and profit rate also decline, hitting new lows in the fifth and eighth quarters respectively, which makes the finishing profit shrink. In terms of full-year revenue in 2022, MediaTek finally recorded a slight increase, reaching NT$118.141 billion, a year-on-year increase of 6%.
Judging from the latest performance of the four major mobile phone chip manufacturers, even well-known companies in the industry have not been able to escape the negative impact of the downturn in the mobile phone terminal market. It is worth noting that the sharp decline in revenue of various companies in Q4 of 2022 indicates that the chip shipment crisis caused by the downturn in the mobile phone market is not over. In 2023, the mobile phone chip supply market still faces huge uncertainties. .
The weakness of the smart phone market has sounded the alarm for mobile phone chip suppliers, and chip companies are also actively looking for new ways out.
In terms of business layout, in addition to the mobile phone business, giants are also actively increasing product lines, making the business more diversified.
Qualcomm has made it clear that the company will reduce spending in more mature business areas and reallocate those resources and funds to automobiles and the Internet of Things, which will be the main drivers of the company's business growth. MediaTek is also investing heavily in 5G products, and strives to accelerate the deployment of mid-to-high-end products. Judging from the progress in 2022, MediaTek’s investment has been somewhat effective, and some products can face Qualcomm’s competition in the mid-to-high-end field.
Apple's terminal products are also expected to be further enriched. Apple will release the long-awaited mixed reality headset this spring, and next year Apple may also launch the iPad with a folding screen.
The further enrichment of the product lines of major manufacturers will greatly promote the utilization rate of chips.
The mobile phone market is still one of the important markets for chip manufacturers. Mobile phones were once the "golden application market" for chips. Technological innovation by partners in the mobile phone industry is also one of the directions that major mobile phone chip suppliers have been striving for in recent years.
Apple and Samsung have their own mobile phone production lines and have natural advantages in this regard. Qualcomm and MediaTek are also strengthening cooperation in this regard. MediaTek released Dimensity's customized open platform in 2021, allowing mobile phone manufacturers to participate in cooperation in the early stages of chip development to jointly improve the AI and other performance of mobile phones, while Qualcomm has started joint debugging with in-depth cooperation customers earlier. device to meet the performance requirements of mobile phones.
