China's smartphone AP shipments grew 16.1% sequentially in the fourth quarter of 2015 mainly thanks to demand for inventory preparation from some vendors and year-end holidays.
This Digitimes Research Special Report explains the dynamics of the global AP market by analyzing key trends in the market including the shift to 4G, the market strategy of the key AP vendors and GPU providers and the role various applications have in influencing demand. Overall, Digitimes Research forecasts that the global application processor market will grow 8.5% in 2016 to reach 1.78 billion shipments.
According to Digitimes Research, after the low season in first-half 2015, demand for smartphones is expected to grow due to the upcoming shopping seasons in China, Europe and the US in second-half 2015. Due to this factor, many firms began preparing to stock up inventory. In third-quarter 2015, China's smartphone AP demand increased significantly with shipments showing growth of 14.9%.
China has been solidifying its semiconductor industry policy objectives through the release of the "National IC Industry Development Guidelines" in June 2014 and "Made in China 2025" in June 2015, with one key financial support program being the National IC Industry Investment Fund (Big Fund), which will be used to help finance production capacity in advanced process technologies. This report analyzes how the Big Fund can affect the China and global semiconductor industry moving forward.
China's smartphone AP shipments recovered in the second quarter of 2015, registering significant on-year growth after vendors had managed to digest their inventories in the previous quarter.
Smartphone AP shipments to China grew 38% on year and 10.1% on quarter in the fourth quarter of 2014, as the expanding coverage of LTE services helped drive shipments.
Digitimes Research estimates China smartphone application processor (AP) shipments will see a 33.8% yearly growth in the fourth quarter of 2014, up 8.7 percentage points from previous quarter. Quarterly growth however will be 9.5%, down 2.2 percentage points from previous quarter.
The LTE market does not perform as expected in the China market while the TD-SCDMA market declines. Smartphone APs experience quarterly growth of 13.2% in China In the second quarter of 2014, with MediaTek's 3G products achieving nearly a 50% market share. In the second half of 2014, the LTE standard will rapidly replace 3G, 64-bit products will enter the mainstream market but overall shipment growth will be limited.
Facing a funding shortage for local IC manufacturers, the China State Council in June 2014 published guidelines to strengthen government support for China's semiconductor industry, while stating the short-, mid-, and long-term goals for the related industry supply chains through 2030. This Digitimes Special Report examines how the revised Central Government guidelines and various local government policy implementations will affect China's the semiconductor manufacturing, IC design, packaging & testing and materials industry.
In the first quarter of 2014, shipments by global smartphone application processor (AP) vendors to China experienced only 10.8% annual growth, with a quarter-to-quarter decline of 4.2%.
