In terms of the shipments of smartphone application processors (AP) in China, downstream vendors started early inventory preparation in the fourth quarter of 2016 resulting in higher supply chain inventory levels. AP orders dropped significantly after the Chinese New Year, with some handset brand makers even asking to defer AP shipments to a large extent.
Digitimes Research expects global application processor (AP) shipments to increase more than 8% in 2017 and surpass the 1.9 billion mark, with smartphones remaining the main application. After slumping in 2015, Qualcomm returned to form in 2016 and will continue leading the market in 2017, as other players continue playing catch up and scramble for funds to invest in more diverse applications such as IoT and other smart end-device applications.
Digitimes Research estimates shipments of AP for smartphones and tablet PC in China in the fourth quarter of 2016 will show a growth of 11.6% on quarter.
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.
