A sharp and scary decline in smartphone sales in 2022

The International Corporation (SMIC) has announced in a detailed report the sharp decline in smartphone sales this year.

The supply of smartphones has decreased in the first quarter of 2022, according to statistics released by the ICAO. Since last month, there have been numerous rumors about the decline in smartphone production by global manufacturers. The impact of this decline on Chinese brands will be greater than other companies active in this field, and the Chinese will suffer the most.

In an interview, IAEA CEO Zhao Haijun said that factors such as the Russia-Ukraine conflict, global inflation, the chip shortage crisis and the outbreak of Corona have reduced the production of smartphones. Recently, the production process of chips such as MCU and WiFi has also encountered problems, and this has naturally had a great impact on the production and sale of smartphones. The MCU and WiFi chips are manufactured by Osmac’s company, which owns several chip factories in Beijing, Tianjin and Shenzhen. OSIC is also working on more advanced chips, including 40-nanometer, 55-nanometer and 28-nanometer chips, but their speed and production capacity are far from ideal.

SMIC chip maker announced last week that it will increase the production capacity of the wafer (a thin section of a semiconductor used to make electronic chips) at its 8-inch factory to 45,000 wafers a month this year. However, capacity building will not happen quickly; Because equipment supply is a time consuming issue. The company continues to struggle with supply chain disruptions due to sanctions imposed by the former US administration.

In an interview, Gao Yonggang, CEO and Chief Financial Officer of SMIC, announced an increase in wafer prices in the second quarter of the year. Some analysts claim that the price of raw materials will also increase following the increase in the price of wafers.

“Given the rising prices of government-managed resources such as water, electricity, heat and raw materials, the company has to raise the price of wafers,” Zhao Hyun said in response to questions about the continuation of this upward trend in the future. Since chip inventory is one of the most important issues in the electronics industry, OSAI is doing its best to remove the existing barriers. However, some products such as power management, mobile phone charger, Wi-Fi and MCU are not yet available in factory warehouses. At the request of customers, the production of chips that are in short supply should flourish, and the production of old chips that do not have the demand should be stopped. For example, the demand for older Wi-Fi 4 and Wi-Fi 5 chips in smartphones may not be high. Therefore, by stopping the production of such chips, the production process of the required chips can be accelerated.

In general, the global wafer market is not in good shape, and this will significantly reduce the production of smartphones.