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Smartphone components to see orders from Apple rise in 2H21

China's smartphone demand failed to gain as much momentum as expected during the Labor Day holidays, resulting in declines in smartphone component shipments in the second quarter, but related orders from Apple will begin to increase in the second half, according to sources from IC distributors.

Major Chinese brands including Oppo, Vivo and Xiaomi were over optimistic about their sales during the May holidays, and their smartphone shipments are expected to drop by around 10-20% sequentially each in the second quarter, which in turn has been underming their demand for components, such memory, voice coil motors (VCM) and CMOS image sensors (CIS), the sources said.

Demand for power amplifier (PA), however, remained flat sequentially, the sources noted.

Since the vendors in the Android camp are expected to unveil their new flagship phones in the second half, pull-ins of orders for VCMs, PAs and memory are expected to increase slightly in the upcoming months from these vendors.

However, demand for these components from Apple is expected to accelerate dramatically starting July, with related makers to also prioritize their supply to Apple.

With next-generation iPhones reportedly to be all equipped with camera modules supporting sensor-shift technology, their demand for VCM is expected to increase dramatically.

The three major PA suppliers of Apple - Skyworks, Qorvo and Broadcom - as well as Taiwanese GaAs wafer foundry Win Semiconductor and epitaxy chip maker VPEC have all already started preparing inventory for Apple's orders, with visibility already extending throughout the whole third quarter.

Although demand for handset memory from Chinese smartphone vendors has dropped slightly in the second quarter and orders from 5G infrastructure applications have also decelerated, the sources expect memory from servers to begin picking up in the third quarter.