Smartphone production records historical decline, says TrendForce

May 05, 2020 // By Julien Happich
Smartphone production
According to market research firm TrendForce, the global spread of COVID-19 in 2020 has brought about the greatest magnitude of declines in the smartphone market in recent years.

Global smartphone production for 1Q20 fell by 10% YoY to around 280 million units, the lowest in five years, due to pandemic-induced disruptions across the supply chain, such as delayed work resumption and labor/material shortages, which caused low factory capacity utilization rates. Turning to 2Q20, there are now improvements to both the supply chain and the work resumption statuses of manufacturing and assembly lines, but the pandemic is now making its effects felt on the demand side of the smartphone market by tanking major economies worldwide. Global production for 2Q20 is now estimated to register another YoY drop of 16.5% to 287 million units, the largest decline on record for a given quarter. TrendForce forecasts total yearly production volume of 1.24 billion units, an 11.3% decrease YoY.


Vivo the last brand to grow in 1Q20

According to TrendForce, 1Q20 leader Samsung will be experiencing constrained growth this year even without the emergence of COVID-19. In addition to the saturation of the market, Chinese brands are exerting continuous pressure on Samsung’s presence in the Southeast Asian and Indian markets by the day. Most of Samsung’s smartphone assembly lines are located in Vietnam and India, and the company possesses about only 2% of the market share for smartphones in China.

Its production was thus not significantly affected by issues related to the disease during the initial phase of the outbreak in China. Nevertheless, the rapid spread of the disease across North America and Europe in the later part of 1Q20 compelled Samsung to lower its device output even as its factories were running as usual. The brand’s production volume for 1Q20 came to 65.3 million units, showing a YoY drop of 9.9%. Moving into 2Q20, India’s smartphone assembly lines have been suspended since late March due to the imposition of a national lockdown. Furthermore, the global economy has gone into a recession. TrendForce thus estimates that Samsung’s smartphone production for 2Q20 will fall by 10.7% QoQ to 58.3 million units.

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