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BoM Analysis: iPhone 15 Pro Max Costs $37.7 More Than iPhone 14 Pro Max

The iPhone 15 Pro Max’s BoM cost is $37.7 higher than that of the iPhone 14 Pro Max.
The industry’s first 3nm-powered SoC A17 Pro, innovative 5x telephoto camera, and a redesigned titanium central panel are major areas of BoM cost increase.
Memory and display are among the areas where cost has fallen.
Share of Apple’s self-designed components has increased to 25% of the total BoM cost.

The iPhone 15 Pro Max is Apple’s most advanced flagship model to date. It nicely segments the portfolio for Apple’s power users who are always looking out for the best iPhone experience. Apple has differentiated its top model with the most advanced processor, a unique telephoto camera system and a lighter titanium-based casing design. This has also made the iPhone 15 Pro Max costlier than its predecessor.

The total bill of materials (BoM) cost to produce an 8GB+256GB iPhone 15 Pro Max comes to $37.7 or 8% higher than that for the 6GB+256GB iPhone 14 Pro Max launched last year, according to Counterpoint Research’s Teardown and BoM Analysis Service. With an increase of $100 in the starting retail price, the iPhone 15 Pro Max is expected to give Apple more profit as it has the highest gross margin in the iPhone 15 family, despite being the costliest model.

Source: Counterpoint Research’s Smartphone Teardown and BoM Analysis

Where the costs have risen

First 3nm process-powered application processor: Apple’s new-generation mobile platform, the A17 Pro, uses TSMC’s most advanced 3nm fabrication technology and packs more than 19 billion transistors in a die, 18% more than that of the A16 Bionic. Thanks to the improved 6-core GPU architecture, the iPhone 15 Pro Max’s GPU performance is 20% faster. As a result, the A17 Pro can deliver vastly improved gaming performance with a breakthrough in enabling real-time 3D ray tracing. However, this SoC upgrade has resulted in a cost increase of around $30 compared with the A16.
Apple’s first 5x telephoto camera: Another notable upgrade is the 5x telephoto camera featuring an equivalent 120mm focal length. This camera consists of a quadruple reflection prism that enables light rays to bounce four times, allowing users to capture sharper close-up shots from greater distances. Lante Optics is the primary supplier of this prism. Additionally, to match the new telephoto system, Apple has designed the 3D sensor-shift OIS in this camera which can make up to 10,000 micro-adjustments per second, enabling users to capture clearer, sharper photos and more stable videos. The development and assembly of the stabilization mechanism involved a collective effort from Cirrus Logic and LG Innotek. The overall cost of the camera system in the iPhone 15 Pro Max is 34% costlier than that of the iPhone 14 Pro Max.
Titanium alloy casing: Apple has adopted a titanium alloy in the iPhone 15 Pro Max casing frame, which has reduced the device’s weight by around 20 g, making it the lightest Pro Max model ever. The cost of the new casing in the iPhone 15 Pro Max is 18% higher than that of the 14 Pro Max.

Where the costs have fallen

Memory: Apple has upgraded the iPhone 15 Pro Max’s DRAM to 8GB, which is 2GB higher than that of its predecessor. However, the global memory market was in a downtrend from Q4 2022 to Q3 2023, both DRAM and NAND flash prices have decreased by more than 30%. This has worked in favor of Apple, helping it offset some of the other cost increases as the contribution of memory chips dropped by 34% compared to the iPhone 14 Pro Max.
Display: The display price is also in a downtrend. Apart from Samsung Display, LG Display has also started supplying iPhone LTPO displays. This has contributed to a reduction in display costs by 4% in the iPhone 15 Pro Max compared to that of the iPhone 14 Pro Max.

Rising share of self-designed components

Apple’s vertical ambitions are evident as its self-designed components, such as the processor, the upgraded UWB and power management ICs, are playing an increasingly significant role in the overall BoM cost of the iPhone 15 Pro Max, garnering Apple great economies of scale and control over the performance and end-user experience. Our estimates indicate that these self-designed components account for 25% of the total BoM cost of the iPhone 15 Pro Max, up from 22% in the iPhone 14 Pro Max last year.

Key takeaways

Apple has grown to a level where it has significant control over design, innovation, scalability, costs and profits of the entire iPhone and the other products in its portfolio.
This is helping Apple with differentiation and is also allowing it to exercise not only significant selling power but also buying power through great vertical design expertise and sourcing of components.
Also, having the most powerful smartphone SoC manufactured at the most advanced process node has allowed Apple to design an SoC with high-performance CPU, pro-class GPU and dedicated neural engines to build pervasive AI experiences, efficiently blending with its vertical software (OS) capability and (apps) ecosystem.
Apple is, thus, raising the table stakes for competition with its flagship, which is set to be the most lucrative iPhone in terms of top line and bottom line.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the technology, media and telecom (TMT) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Shenghao Bai

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iPhone 15 series, Apple Watch Series 9, Watch Ultra 2: First Impressions from Apple Event

Qualcomm Dominates Premium Android Smartphone Chip Market in Q1 2022

Both Qualcomm and MediaTek posted healthy growth in Q1 2022. MediaTek recorded an impressive set of numbers for the quarter with revenues growing 32% YoY and 10.2% QoQ to reach $4.8 billion. Qualcomm saw its third consecutive quarterly record revenue in Q1 2022 at $11.6 billion. Its business units recorded annual growth of between 28% and 61%.

MediaTek led the Android smartphone SoC market in 2021 with a 44% share, followed by Qualcomm with 35%, according to the latest research from Counterpoint’s Global Handset Model Sales Tracker.

Qualcomm’s focus on the premium smartphone segment (>$500) has helped it to grow revenues. Its Snapdragon 800 series and Snapdragon 700 series, notably the flagship Snapdragon 8 Gen 1 and Snapdragon 778G, are both key volume drivers. Furthermore, Qualcomm has gained a 75% share of Samsung’s Galaxy S22 series shipments. In previous Samsung flagship models, there was a more equitable split between Qualcomm Snapdragon-powered SKUs and Samsung Exynos-powered SKUs. Qualcomm is also driving more revenues with its RFFE (RF Front End), allowing it to capture a higher share in the BoM.

MediaTek dominates the low-mid tier wholesale price segment ($100-$299), driven by its Dimensity 700 and Dimensity 900 series. Also, the 4G SoC in the <$199 price band is driven by the P35, G80 and G35 chipset models. MediaTek has entered the premium segment with the Dimensity 9000 series, but the sales will only start to pick up in Q2 2022.

AP Chipset Share for Android Smartphones by Price Band, Q1 2022

Qualcomm

Qualcomm is focusing on the premium (>$500) and mid-high ($300-$499) segments for revenue growth. Qualcomm is an industry benchmark when it comes to premium smartphones.
Qualcomm’s focus is on the 7 and 8 series Snapdragon chipsets, which drive higher revenue and profitability. Qualcomm acknowledged it has seen a slowdown in the low- and mid-price tiers. But this was more than offset by strong premium-tier sales.
Further, the design wins with 75% of sales of the Galaxy S22 family, up from 45% of the S21 family, helped Qualcomm strengthen its position in the premium Android segment in Q1 2022.
According to Counterpoint’s Global Smartphone AP-SoC Shipments and Forecast Tracker, the premium segment Qualcomm Snapdragon 700 and 800 series contributed around 68% of the AP/SoC shipments in Q1 2022.
Qualcomm’s share in the >$500 band increased from 47% in Q1 2020 to 71% in Q1 2022, growing 23% YoY in Q1 2022, owing to the launch of its Snapdragon 888 and Snapdragon 8 Gen 1 chipsets.
Focus on the premium segment will help Qualcomm ride out the slow China market, global macro-economic situation and high inventories.

MediaTek

MediaTek dominated the <$299 price tier and drove significant volumes both for 4G and 5G in this tier. Entry of the Dimensity 9000 enables MediaTek to capture share in the premium band (>$500). This is the first time MediaTek has entered this tier. MediaTek has already announced design wins with Chinese smartphone OEMs like OPPO, vivo, Xiaomi and HONOR. This opens more competition and opportunities for growth in the premium segment.
The volume in the ≤$99 price band was driven by LTE smartphones, where MediaTek captured a 47% share. LTE SoCs have been affected by the ongoing shortages and will be in short supply in 2022.
In the $100-$299 price band for Android, MediaTek captured a 60% share in Q1 2022 driven by its Dimensity 700 and 900 series.
MediaTek will continue to gain share in the $100-$299 price band as 5G penetrates markets like India, APAC others, LATAM and MEA. Smartphone OEMs like Xiaomi, Samsung, OPPO and vivo will likely launch affordable 5G smartphones under $200.
MediaTek has entered the premium segment with its Dimensity 9000 series. However, the sales are only expected to pick up in Q2 2022.
Overall, we forecast around an 8% share for MediaTek in the premium segment in 2022. MediaTek growth in Q2 2022 is expected to come from mid-high range phones due to the shifting of demand from LTEto 5G AP/SOCs. Further, with the launch of the Dimensity 8000 series, MediaTek wants to focus on and consolidate the $300-$499 price bands. This will also help MediaTek pivot volumes from the low-mid segment to mid-high to premium segments.

Samsung

Samsung Exynos’ share declined in Q1 2022 due to the loss in share to Qualcomm in the Galaxy S22 series and also due to the low yields of the 4nm premium Exynos chipsets.
Share in the premium segment declined from 34% in Q1 2021 to 23% in Q1 2022.
Samsung has launched the Galaxy A33 and A53 with its Exynos 1280 SoCs. These are the volume drivers that will help it to regain share from MediaTek and Qualcomm through the rest of 2022.
In the low-mid segment ($100-$299), Samsung’s share declined to 7% in Q1 2022 from 10% in Q1 2021 due to outsourcing of its models (A, F and M series) to ODMs, which integrated mostly Qualcomm, MediaTek or UNISOC solutions in different models depending on the target price bands.
In the low tier, Samsung is using UNISOC SOCs in the Galaxy A03 smartphone. The share of Samsung smartphones is almost negligible in this segment.

UNISOC

UNISOC continues to gain share in the low bands (<$99) driven by the LTE portfolio. Its share in the <$99 band grew to 47% in Q1 2022 from 20% in Q1 2021.
With realme, HONOR, Motorola and Samsung launching phones with its Tiger series SoC, UNISOC has expanded its customer base with design wins at ZTE and TECNO and entry into the Samsung Galaxy A series.
It has also captured an 8% share in the $100-$199 price band with HONOR, realme and Samsung.
For 2022, we expect UNISOC to maintain the momentum with its portfolio catering to LTE smartphones, as MediaTek struggles with supply issues for 4G chipsets and Qualcomm focuses on 5G solutions. Also, a few design wins with 5G chipsets will add to its overall volumes and help support its value growth.

HiSilicon

We expect HiSilicon volumes to decline in 2022 as the inventory is depleted. Huawei has already started using Qualcomm SoCs in its new launches, but these are limited to 4G due to the prevailing US sanctions.

Entry Into Flagship Segment, 5G AP/SOCs Lead to Strong Growth for MediaTek in Q1 2022

MediaTek recorded an impressive set of numbers for Q1 2022 with revenues growing 32% YoY and 10.2% QoQ to reach $4.8 billion. The company’s mobile phone segment achieved a revenue of $2.7 billion, growing 29% YoY. According to Counterpoint Research’s Smartphone, AP/SOC Shipment Tracker, the addition of the Dimensity 9000 to the premium segment has added meaningfully to the overall revenues that have also been driven by 5G AP/SOCs in the mid-tier segment. LTE AP/SOCs are still attracting high demand and will be in tight supply throughout 2022. Based on our data, LTE AP/SOCs contributed to one-third of the total AP shipments in Q1 2022.

MediaTek Revenue by segment

The smart edge segment contributed 39% to MediaTek’s Q1 2022 revenues. This segment is mainly driven by the Wi-Fi 6/6E migration and higher-end solutions for smart TVs and tablets. Technology migration trends in smart edge platforms have led to a higher blended ASP in this segment.
The power IC segment accounted for 8% of the total revenues, growing 52% YoY and 21% QoQ. A large part of the PMIC segment’s revenue is coming from displays and smartphones. Automotive and industrial applications contribute to 10% of the PMIC revenue and will drive growth for this segment in 2022.
MediaTek guided revenues to be in the range of $5-$5.3 billion in Q2 2022, up 3~10% QoQ and 17~25% YoY. The mobile phone segment will show the strongest growth due to the shifting of demand from LTE to 5G AP/SOCs. As the China market is slowing, the revenue growth will come from other regions like India and Europe. Also, the Dimensity 9000 and 8000 series will continue to add to the revenues in Q2 2022. However, due to the slowdown in China and deteriorating macroeconomic conditions, we have reduced our H2 2022 forecast for the Dimensity 9000.
Revenues from Wi-Fi 6, 5G SIM modem, 5G tablet, 10G-PON and 4K smart TV are also expected to grow strongly in H2 2022. Also, MediaTek’s mmWave SOC is on schedule to ship in the second half of 2022. It will pave the way for MediaTek’s further expansion in the global market.
According to Counterpoint Research’s Smartphone AP/SOC Shipment Tracker, MediaTek will continue to lead the smartphone AP SOC market with a volume share of 41% in Q2 2022, followed by Qualcomm with 27%. The company’s strategy of 5G, Wi-Fi 6, focused product migration, geographic expansion with global customers, and penetration into high-end and flagship segments will allow MediaTek to retain and even improve its strong market position.
China slowdown, COVID-19 lockdowns and macroeconomic conditions will affect the global smartphone market. MediaTek guides flat growth for the smartphone market in 2022 and 5G penetration (660-680 million units) reaching 50%. Further, 5G penetration is expected to reach 70% in the next two years.
Smartphone OEMs like OPPO, vivo and Xiaomi currently have inventories with distributors and also for components like AP/SOCs, PMICs and DDICs. This has led to a drop in AP/SOC orders for MediaTek for H2 2022. But MediaTek is keeping a high inventory reserve this quarter to sustain its OEM and ODM partners during the worsening COVID-19 situation. MediaTek normally runs with around 90 days of inventory. But it has now raised this to around 100 days to manage potential supply constraints.
MediaTek sought to reassure investors that it would not follow a low pricing strategy to counter slowing demand. Instead, it will invest in future growth. Its pricing strategy will also leverage its high capacity and will manage profitability by maintaining similar pricing as the previous quarter. We expect overall 5G AP/SOC ASPs to be flat compared to last year. If the competition reduces the prices, it will be challenging for MediaTek to maintain growth in H2 2022. Due to the strong demand for LTE AP/SOCs, the ASPs will not decline this year. Overall, 5G AP/SOCs will have a premium pricing over LTE. The company is now focusing on developing 5G AP/SOCs for low-end phones priced less than $150. We believe this will happen two years down the line. However, based on our estimates, LTE is going to dominate the less than $100 smartphones, driven by regions like LATAM, Africa and APAC.
Presently, MediaTek is not a big player in the PC business, having only a few Chromebook-type devices in the market. The company played down its expectations for substantial growth in the PC sector while confirming that it was interested in the potential of the Arm-based PC market.
Smartphones still contribute 53% of the revenues for MediaTek. For longer-term growth, MediaTek has to reduce dependence on smartphones and expand into areas like the smart edge, automotive, connected PCs and AR/VR.

MediaTek Records Strong Revenues. Mid-teens Growth Expected Through 2025

2021 saw record revenues of $17.6B, growing 53% annually (2020 $11.5B). and operating margin both increased for the fourth consecutive year, driven by investment in 5G, Wi-Fi 6 and low-power technology.
4Q 2021 revenues were down sequentially 2% and up 33.5% YoY. The sequential decline was due to a reduction in smartphones revenues (down 9% QoQ).

Exhibit 1: MediaTek Revenue, Sales to Gross Profit, R&D & Operating income

Its smartphone chipset volumes declined this quarter due to the high shipments in the first half and inventory corrections from Chinese smartphone OEMs. Because of the supply chain constraints, many customers built chipset inventory to manage uncertainties in the supply situation. The chipset inventory increased again this quarter due to the market situation.
Guidance for 1Q 2022, Revenue $4.7-$5.1B up 2-10% sequentially driven by flagship chipset (Dimensity 9000) for smartphones, and higher 5G penetration which will offset the lower seasonal demand. Also, the increase in the chipset pricing after TSMC’s hike in wafer price is reflected from Q4 2021 onwards.
Growth Outlook: In 2022 revenue growth to exceed 20% with a gross margin target of 48% to 50%, owing to a better product mix and strong technology migration. 2022 is going to be another strong year as the foundry supply becomes more manageable. Mediatek already has the needed capacity with TSMC.
It expects TAM to grow from $2.8B in 2021 to $5.1B in 2024. CAGR of mid-teen % for the next three years, with all revenue groups growing.
Mobile to grow from $1B in 2021 to $1.8bn in 2024
Smart Edge to grow from $1.4B in 2021 to $2.8B in 2024
Power IC to grow from $0.3B in 2021 to $0.5B in 2024
According to Counterpoint’s Smartphone Chipset Shipment forecast, we expect MediaTek to lead the smartphone chipset market with a 39% volume share in 1Q 2022 followed by Qualcomm with 29%.
Mediatek has guided long term revenue growth, but most revenues will still be driven by smartphones. It will need to look for new growth areas either by investment or merger to remain competitive with Qualcomm, which is diversifying into Automotive, IoT, RF etc.
MediaTek has secured major Dimensity 9000 design wins across multiple Chinese OEMs e.g., Oppo, Vivo, Xiaomi etc. The first model is scheduled to launch in March. We expect MediaTek’s flagship (3/4/5nm nodes) chipset to gain a 9%-10% market share in 2022.
MediaTek’s 2022 blended chipset ASPs will be flat to slightly up due to the increasing mix of the 5G, flagship products. Further 4G chipset absolute revenues will be flat to a slight decline as the 5G chipset mix increases. According to Counterpoint’s Market Outlook service, 5G smartphone penetration is forecast to reach 54% of the total smartphone market, accounting for 800mn units.
MediaTek has design wins in the Automotive segment, with infotainment applications. It also has the potential of adding 5G modems and IoT modules with companies such as Quectel, Fibocom, etc. Right now, these are not big revenue drivers, but a couple of years down the line will drive significant volumes.
Notebooks/PC: With 5G modems, Wi-Fi 6/6E, Kompanio chipsets (for Chromebooks) it gained in the notebook segment in partnership with Intel and AMD.
Another area for growth is Consumer Premises Equipment (CPE) for global operators using both 5G modem and Wi-Fi chipset in the applications like Fixed Wireless Access (FWA) etc.
Extended Reality (XR) is a focus segment for MediaTek which will drive revenue. According to Counterpoint’s Extended Reality headset forecast, shipments are projected to grow about 10x from 11Mn units in 2021 to 105Mn in 2025.
MediaTek is investing in the core technology to drive growth, like 5G modem with low latency, mmWave support, next-gen. Wi-Fi, 6G, security IP etc.

MediaTek Leads Smartphone SoC Shipments in Q3 2021; UNISOC Reaches Double-digit Share

Qualcomm grew 9% QoQ due to dual sourcing from foundries.
UNISOC market share entered double digits at 10%.
Qualcomm led the 5G baseband market with a 62% share.

Seoul, Taipei, Beijing, New Delhi, London, Boston, Toronto, Hong Kong – December 15, 2021

Global smartphone AP (Application Processor)/SoC (System on Chip) shipments grew 6% YoY in Q3 2021, according to the latest research from Counterpoint’s Foundry and AP/SoC Service. 5G smartphone SoC shipments grew almost two times compared to the same period last year.

Research Director Dale Gai said, “MediaTek led the smartphone SoC market with a 40% share, driven by a competitive 5G SoC and high demand for the 4G SoC. MediaTek’s revenues grew sequentially as the mix of the mid-end and high-end SoC portfolios grew. The blended ASP will continue to increase due to the launch of flagship products in Q1 2022 and an increase in chipset prices starting Q4 2021. 4G chipsets continued to be in strong demand due to the ongoing shortages, which have affected 4G SoCs more.”

Global Smartphone AP/SoC Shipments Market Share, Q3 2020 vs Q3 2021

Source: Counterpoint Research Quarterly AP/SoC/Baseband Shipments Tracker, Dec 2021

Commenting on Qualcomm’s performance, Research Analyst Parv Sharma said, “Qualcomm’s smartphone SoC shipments grew both QoQ and YoY in Q3 2021. The key to Qualcomm’s revenue growth was its ability to dual-source manufacturing of key components, namely the Snapdragon 800 series SoCs and its premium 5G modem. Qualcomm led the 5G baseband market with a 62% share. It gained from the 5G baseband modem chipset win in the Apple iPhone 13 series and demand for its complete 5G SoC chipsets, from the flagship 8 series to affordable 4 series. MediaTek also saw strong momentum from the Dimensity 700 and 800 series in the low-mid segment.”

Global 5G Smartphone Baseband Shipments Market Share, Q3 2020 vs Q3 2021

Source: Counterpoint Research Quarterly AP/SoC/Baseband Shipments Tracker, Dec 2021

Market Summary:

MediaTek dominated the smartphone SoC market in Q3 2021 with a 40% share. It gained share in the low-mid segment 5G portfolio. LTE SoCs further helped it to strengthen its market position.

Qualcomm grew 9% sequentially due to dual sourcing from foundries. It dominated the 5G baseband modem shipments with a 62% share. The refreshed portfolio in the Snapdragon 7, 6 and 4 series will further help it gain share in Q4 2021.

Apple maintained its third position in the smartphone SoC market in Q3 2021 with a 15% share. With the launch of the iPhone 13 and festive season, its share will grow further in Q4 2021. However, component shortages will affect its festive season sales.

UNISOC shipment growth continued for the third consecutive quarter in Q3 2021. Its market share entered double digits during the quarter at 10%. The company has succeeded in expanding its customer base, securing a series of design wins with major OEMs like HONOR, realme, Motorola, ZTE and Transsion. Further, it also had a design win in Samsung’s Galaxy A series.

Samsung Exynos slipped to the fifth position with a 5% share as it is in the middle of rejigging its smartphone portfolio strategy of in-sourcing as well as outsourcing to Chinese ODMs. Therefore, the share of MediaTek and Qualcomm has been growing across Samsung’s smartphone portfolio, from the mid-range 4G and 5G models manufactured by ODMs to the flagship ones.

HiSilicon remained affected by the US trade ban. Huawei was unable to manufacture the HiSilicon Kirin chipsets. The accumulated inventory of Kirin SoCs is on the verge of being exhausted. As a result, Huawei is launching its latest series with Qualcomm SoCs but limited to 4G capabilities.

For our comprehensive research on foundry to chipsets to devices, get in touch with us at the contacts given below.

Background:

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Dale Gai

Parv Sharma

Follow Counterpoint Research
press(at)counterpointresearch.com

Foundry Strategy & Chipsets Supply Shaping Smartphone SoC Competitive Dynamics in 2021

Seoul, Taipei, Beijing, London, Boston, Toronto, New Delhi, Hong Kong – May 3, 2021

MediaTek to lead global smartphone SoC market with 37% share whereas Qualcomm will lead the global 5G smartphone SoC market with 30% share.
The leading-edge nodes (7nm, 6nm and 5n) will account for almost half of the smartphone shipment volume during 2021.
5G AP/SoC chipset volumes will more than double annually in 2021.

The competitive dynamics in the smartphone AP/SoC market is changing fast for the fabless SoC vendors such as Qualcomm, MediaTek, Apple and others. The market outlook for these vendors is being shaped by not only the breadth and depth of the capabilities or tiering of the chipset portfolio but also by the choice, the share of the capacities across different edge-nodes at the foundries. Global smartphone AP (Application Processor)/SoC (System on Chip) chipset shipments will grow 3% YoY in 2021, factoring in the impact of supply constraint, rapid growth of 5G smartphones and related competitive dynamics according to the latest research from Counterpoint’s Foundry & Application Processor (AP/SoC) research.

Commenting on the research, Research Director Dale Gai said, “When we break down our forecast with respect to the current demand-supply dynamics, MediaTek is likely to continue its Q4 2020 momentum into 2021 and likely to capture 37% unit share of all the smartphone AP/SoC shipped for the full the year. This 20% potential annual uptick in demand is a function of competitive 5G portfolio powering sub-$150 5G smartphones manufactured at TSMC without any supply constraint and growing share in 4G segment. Further, MediaTek in the first half of 2021 will benefit from Qualcomm’s current supply constraints around RFICs (radio-frequency integrated circuits) from Samsung’s Austin fab, Power management ICs (PMIC), and relatively lower 5nm production yields.”

Exhibit 1: Global Smartphone AP/SoC Market Share (%) Outlook

Global smartphone chipset share

Source: Counterpoint Research – Foundry & SoC Outlook, Apr 2021

Mr Gai, added, “However, we believe Qualcomm to bounce back strongly in H2 2021, firstly by securing greater capacity at TSMC to boost its 5G-centric tiered Snapdragon portfolio. Secondly, taking key steps to improve the supply of PMICs and RFICs should alleviate the supply constraints in coming months. This will allow Qualcomm to maintain its leadership in 5G SoC market and overall market share of 31% still growing annually.”

Highlighting the importance of leading-edge nodes and securing capacities for the same, Mr Gai noted, “The leading-edge nodes, including 7nm, 6nm and 5nm, will account for almost half of the smartphone shipment volume in 2021. These leading nodes are mainly for 5G smartphone models, as advanced nodes (e.g., 11/12/14nm at TSMC and Samsung) will serve the mainstream 4G LTE chipsets in 2021.”

Exhibit 2: Global 5G Smartphone AP/SoC Market Share (%) Outlook

5G smartphone chipset forecast

Source: Counterpoint Research – Foundry & AP/SoC Outlook, Apr 2021

Commenting on the growth of 5G smartphone chipsets, Research Analyst Parv Sharma highlighted, “We estimate Qualcomm to increase its 5G SoC market share to grow to 30% mark in 2021, with 5G solutions across the tiers, from Snapdragon 8-series down to 4-series. If you include 5G baseband shipments to Apple, the overall 5G chipset market share jumps to 59% level. In an ideal scenario, Qualcomm’s market share in 5G segment would have been even higher if it did not face the unfortunate supply constraints in the first half of 2021. As Qualcomm turns to place more wafer orders on TSMC’s 6nm/5nm from Q2 2021, following the below-expectation wafer output of the Snapdragon 888 in the beginning of the year, we expect it to resume its 5G SoC shipment growth from H2 2021.”

Mr. Sharma further adds, “MediaTek leveraging TSMC and its affordable 5G portfolio is well-positioned to almost double its market share in 5G smartphone SoC/AP segment. Together, MediaTek and Qualcomm occupy nearly two-thirds of the 5G smartphone SoC market demand, but the gap between the two has narrowed. Having said that, the foundry capacity will continue to remain tight till early 2022, before the next wave of CAPEX realizes at the leading nodes.”

For our comprehensive research on foundry to chipsets to devices, feel free to contact us at the contacts below.

Background:

Analyst Contacts:

Dale Gai

Parv Sharma

Follow Counterpoint Research
press(at)counterpointresearch.com

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