The purchase of non-Apple mobile phones is sluggish. The leader Samsung reported that it has cut orders for the main 5G entry-level model Galaxy A23. The order has dropped sharply from 12.6 million units to 4 million units, a drop of up to 70%. Although Taiwan does not have a major supply chain for this model, Samsung cut orders because all of them use Qualcomm chips. The industry is worried that Qualcomm’s inventory will surge accordingly, detonating a price war for mobile phone chips, which is not good for MediaTek (2454).
Originally, the market believed that following entering the 5G generation, except that some models of Apple and Samsung use self-developed chips, there are only two main suppliers of mobile phone chips in the world, MediaTek and Qualcomm, and both MediaTek and Qualcomm mainly use TSMC. The cost structure The difference is not big, and the probability of the two powerhouses actively launching a price war is low.
However, the buying momentum of non-Apple mobile phones has been weak recently, and foreign investors in the United States have warned that Qualcomm has successively launched a price war on entry-level 5G chips. According to past experience, price wars bring fluctuations in market share and gross profit margins.
Industry insiders pointed out that the Samsung Galaxy A23 is divided into two versions, 4G and 5G. The total annual sales volume is estimated to be regarding 30 million units, accounting for regarding 10% of Samsung’s total annual shipments. It is considered a hot-selling model. Among them, the 5G version is priced at around US$200, which is Samsung’s main 5G entry-level model.
The Korean media TheElec revealed that due to global inflation suppressing the purchase of non-Apple mobile phones, and a certain function causing problems with mobile phone operation, Samsung slashed orders for the main entry-level 5G model, the Galaxy A23, from 12.6 million units originally ordered to 4 million units. The reduction was as high as 70%.
It is reported that the Galaxy A23 5G version does not have a major supply chain in Taiwan. Its chip uses Qualcomm’s “Snapdragon 695”, and the lens is supplied by the Chinese company Sunny. As Samsung slashed 70% of its orders, the industry judged that Qualcomm’s inventory may increase sharply. In order to eliminate the inventory, Qualcomm will inevitably have to bargain, detonating a price war for mobile phone chips, which is not good for MediaTek.
Regarding the market outlook, MediaTek previously emphasized that under the company’s diversified layout, with the ferment of new applications such as automotive electronics and data centers, the semiconductor industry will enter a “diversified growth era”. At that time, market application concentration will decrease and volatility will also increase. will weaken.
Affected by the poor buying momentum of non-Apple mobile phones this year, MediaTek has revised down its annual revenue growth target. The latest report from the market research agency Counterpoint also pointed out that although MediaTek continued to be the leader in global smartphone processor shipments in the third quarter of this year, its market share fell to 35%, a quarterly decrease of 3 percentage points, reflecting weak demand for mid-to-low-end mobile phones and Affected by continuous inventory adjustments, it is expected that shipments will continue to decline this quarter due to sluggish demand and mainland mobile phone brand customers cutting orders.
Due to Qualcomm’s focus on the high-end market and Samsung’s new flagship Galaxy S23 series orders for next year, its market share in the third quarter increased to 31%. Cargo momentum is also weak, and it is not expected to enter the recovery cycle until the second half of next year.
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