US-China trade friction drives display shipments down
Global smartphone display shipments fell by 20 percent sequentially to 409 million units in 1Q19 down 20 percent from 512 million in 4Q18. The market is poised to drop again in the second and third quarters, as the U.S.-China trade war worsens the wireless market’s woes.
On a year-over-year basis, shipments declined by 9 percent compared to the first quarter of 2018. The second quarter is expected to bring an 8 percent year-over-year decrease in smartphone display shipments, followed by a 12 percent drop in the third quarter.
The smarthphone business was already facing problems with market saturation and extended replacement cycles but this has been compounded by concern over US-China trade friction and what this does to Chinese smartphone suppliers such as Huawei and Oppo.
Huawei rose phenomenally as a supplier of smartphones in 2018 and went above Apple to take second place behind Samsung.
“With its position at the forefront of the supply chain, the display business serves as an early indicator of smartphone market trends,” said Hiroshi Hayase, senior director at IHS Markit. “Right now, that indicator is flashing warning signs as smartphone OEMs and ODMs reduce their display orders.”
Despite the overall decline in smartphone display shipments, the active-matrix organic light-emitting diode display (AMOLED) market is expected to continue to expand in 2019. The main smartphone AMOLED supplier, Samsung, will be unaffected by the U.S. Huawei ban, allowing it to continue increasing shipments through 2019.
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