Some Taiwanese media said that Huawei will launch a second wave of order cuts. This time the main target is the 5G mobile phone to digest the inventory of up to 40 to 50 million.
This order cut will have a larger impact, and supply chains such as TSMC, BOE, Largan, and Wenmao will all be affected! The 5G industry chain will be affected.
The news mentioned that Huawei’s smartphone channel inventory is about 40 million to 50 million units. If Huawei cuts the order , it will affect about 20,000 wafers of TSMC in a single quarter, which is equivalent to about 20% of the 7nm production capacity in the second quarter. %, and part of the production capacity cannot be passed on to other customers to make up for it, which is expected to affect TSMC's single-quarter revenue by about 5%. TSMC is the main foundry of HiSilicon chips used in Huawei mobile phones. U.S. foreign investors pointed out that based on Huawei’s smartphone channel inventory of approximately 40 million to 50 million units, Huawei’s cut of orders will affect TSMC’s approximately 20,000 wafers in a single quarter, which is equivalent to 20% of TSMC's 7nm production capacity in the second quarter of this year; considering that MediaTek's 5G SoC and other manufacturers in Huawei's supply chain may also cut orders, estimates that the overall impact on TSMC's second quarter revenue will be about 5%.
However, U.S. foreign investors believe that Huawei's cut of orders will have limited impact on TSMC. In addition, base stations and telecommunications equipment continue to increase, as well as medical applications, game display chips and Apple orders continue to be in demand. They are optimistic about TSMC's mid- to long-term growth trend.
U.S. foreign investors emphasized that TSMC’s second-quarter revenue was previously expected to decline by 3.9% quarter-on-quarter, and it has not adjusted its previous forecast. Industry insiders said that it was reported at the beginning of the year that TSMC would proactively adjust HiSilicon orders. TSMC’s 7nm orders were already full, so the impact would not be significant. Huawei is the world’s second-largest smartphone manufacturer, after Samsung. The market is worried that the second quarter is originally the off-season for the mobile phone industry, which relies on non-Apple manufacturers such as Huawei to support the market. If Huawei cuts orders again, the off-season for the related supply chain in the second quarter may only become even weaker.
In fact, in addition to Huawei, Apple has recently announced that it will not be able to achieve the previously released revenue forecast range for this quarter; key component manufacturers have also recently lowered their revenue expectations one after another, especially radio frequency component suppliers. On Thursday, Qorvo, Apple’s radio frequency component supplier, just revised its Q4 revenue forecast, lowering it from the previous range of $800 to $840 million to the current $770 million. Skyworks, another major radio frequency component manufacturer, followed suit yesterday by lowering its financial forecast for this quarter. The latest forecast is that single-quarter revenue will be between US$760 million and US$770 million, lower than the previous forecast of US$800 million to US$820 million, and has been revised downwards. The midpoint of earnings per share was $1.34, down nearly 10% from the previous estimate of $1.46.
Previously, a report given by the research organization Counterpoint also showed that among mobile phone manufacturers, Huawei currently has a relatively high inventory, with about 30 million units since December. With the impact of the domestic epidemic, the number is higher than There was much more before. Except for Huawei, the inventories of other manufacturers are basically at normal levels, all around 10 million units, including , Xiaomi , OV, etc. Now that the epidemic is spreading around the world, this has hit mobile phone manufacturers in all directions.
Offline sales of China’s smartphone market will decrease by up to 50%
Market research institutions Canalys, IDC, and Counterpoint have successively issued reports showing that in the first quarter of this year, China’s mobile phone market will face a sharp decline of about 40% year-on-year (the highest decline will be Reaching 50%) . In March, if the epidemic is stably controlled, the overall market will gradually enter a recovery period, but it will still be difficult to return to the same period last year. As the impact of the epidemic gradually subsides and product rhythm returns to normal, market demand begins to be released. The market is expected to rebound in the second quarter and the second half of the year. For the whole of 2020, the domestic mobile phone market is expected to experience a year-on-year decline of approximately 4%. However, judging from these reports, the industry's outlook for the mobile phone market in the first half of 2020 tends to be conservative, because the impact of the epidemic does not know when it will end. The share of online channels will further increase during the epidemic. In the short term, consumers with phone purchasing needs will have to choose online channels to purchase phones. The proportion of online channels will increase significantly in the first quarter and first half of 2020.
However, judging from the actual sales ratio of the Chinese mobile phone market, offline sales of Huawei, OPPO, vivo, Apple and other manufacturers can account for more than 80% of the total, so this is also the key to why the epidemic will seriously affect the Chinese mobile phone market.
