Chinese $80 Billion Fabless IC

Latest survey of Top fabless semiconductor IC shows the result of a large effort by China to increase the number of IC companies (see below).

 Between 2009 and 2014 the number of Chinese fabless IC companies in top 50 increased from one (HiSilicon) to nine (HiSilicon, Spreadtrum, Datang, Nari Smart Chip, CIDC,  ZTE, Rockchip, RDA, Allwinner) .

"In 2014, the Chinese government described new semiconductor industry programs that will utilize investment by both the Chinese national government ($19.5 billion) and local government and private equity investors ($97.4 billion).”

Already "Chinese fabless IC suppliers held 8% of the top 50 fabless IC market ($80.5 billion) in 2014 and currently hold twice as much top 50 fabless IC market share as the European and Japanese companies combined! Nineteen U.S. companies were represented among the top 50 fabless suppliers in 2014, and they accounted for 64% of the total top 50 fabless company IC sales.  In 2014, Japan held less than 1%”

Ron
Insightful, timely, and accurate semiconductor consulting.
Semiconductor information and news at - http://www.maltiel-consulting.com/

China Charts New Course in Targeting Worldwide IC Industry—Fabless!

January 08, 2015

Chinese companies held 9 of the top 50 spots in the 2014 fabless IC company ranking, up from 1 in 2009.

Later this month, IC Insights’ will release the 2015 edition of The McClean Report, which includes a ranking of the top 50 fabless IC suppliers for 2014.

China’s ambitious late-1990s plan to create numerous high-volume indigenous IC manufacturers in the pure-play foundry segment did not come to fruition, but the Chinese government is still very serious about keeping China and Chinese IC suppliers relevant in the future IC industry.  In 2014, the Chinese government described new semiconductor industry programs that will utilize investment by both the Chinese national government ($19.5 billion) and local government and private equity investors ($97.4 billion).  IC Insights believes that these outlays have to potential to significantly change the future IC supplier landscape.

As Chinese IC design houses continue to advance, IC Insights expects an increasing number of China-headquartered companies to move up in the ranking of top fabless IC suppliers.  As shown in Figure 1, there were nine Chinese companies among the top-50 fabless companies in 2014 as compared to only one company in 2009.

In total, the Chinese fabless IC suppliers held 8% of the top 50 fabless IC market ($80.5 billion) in 2014 and currently hold twice as much top 50 fabless IC marketshare as the European and Japanese companies combined! Nineteen U.S. companies were represented among the top 50 fabless suppliers in 2014, and they accounted for 64% of the total top 50 fabless company IC sales.  In 2014, Japan held less than 1% and the “other” countries (e.g., South Korea, Singapore, etc.) represented only 6% of the market held by the top 50 fabless IC suppliers.

Although its original plan of establishing numerous large indigenous IC manufacturers in China was not successful, it is obvious that the Chinese government still intends to create a dynamic environment in the China-based IC industry, including placing additional emphasis on establishing new fabless IC suppliers.  IC Insights believes that the Chinese government’s commitment to creating a more powerful Chinese presence in the future IC industry is alive and well and should be taken seriously.

                       

Figure 1

More details on the 2014 top 50 fabless IC suppliers and China’s future role in the IC industry will be provided in The 2015 McClean Report.

Smartphone: MediaTek Overtaking Qulacomm

The increasing importance of emerging markets to the smartphone market is helping MediaTek to gain on Qualcomm in term of shipment volume as is discussed in the article below.

More on MediaTek growth (from January 2013) with the help of "Coolpad, Huawei, Lenovo, Samsung and ZTE surged ahead of Apple.."




Ron
Insightful, timely, and accurate semiconductor consulting.
Semiconductor information and news at - http://www.maltiel-consulting.com/

 

 

 

Commentary: Qualcomm likely to be dethroned by MediaTek as the largest handset solution vendor

Cage Chao, Taipei; Steve Shen,  [Wednesday 24 July 2013]

 

With the planned release of LTE-enabled and 8-core SoCs in the fourth quarter of 2013, MediaTek will advance one-step further to beat venerable rival Qualcomm to become the world's largest supplier of smartphone solutions in terms of shipment volume.

 

Already taking up an over 50% of the solution market for the entry-level to mid-range smartphones in China and other emerging markets, the launch of LTE and 8-core CPUs will help ramp up MediaTek's share in the high-end smartphone solution market.

 

Additionally, the developments of application CPUs by Apple and Samsung Electronics, in-house for their high-end smartphones have worked to limit Qualcomm's growth potential in the high-end smartphone solution market as Apple and Samsung were previously the two major high-end smartphone solution clients for Qualcomm.

 

The outstanding performance-price ratio of MediaTeks' smartphone solutions combined with market proven records of China-based branded and white-box smartphone vendors to launch differentiated models by optimizing MediaTek solutions have enabled the Taiwan-based fabless IC house to push sales of its smartphone solutions to Sony Mobile Communications, LG Electronics and Motorola Mobility, and therefore further expanding its share in the global handset solution market.

41.6% Worldwide Growth of Smartphones in First Quarter

Statistics about operating system market shares of smart phones in first quarter of 2013 are detailed below.

"Android OEMs shipped 162.1 million handsets in the quarter, giving the platform a 75% share of total worldwide shipments, while Apple’s 37.4 million devices"

More Smartphone/ OS Market share: Apple, Samsung, HTC...

Samsung Galaxy S4 will increase Androids' second quarter market shares. 

Ron
Insightful, timely, and accurate semiconductor consulting.
Semiconductor information and news at - http://www.maltiel-consulting.com/

IDC: Android OEMs Shipped 162M Smartphones In Q1, More Than 4X Apple’s Rate; Windows Phone Now In (Distant) Third

INGRID LUNDEN  posted yesterday

http://techcrunch.com/2013/05/16/idc-android-oems-shipped-162m-smartphones-in-q1-more-than-4x-apples-rate-windows-phone-now-a-distant-third/

IDC today was the latest to publish its numbers on smartphone market shares after the major handset makers released Q1 earnings, and like Gartner,Strategy Analytics and the rest, it underscores the power of Google’s Android platform at the moment: Android OEMs shipped 162.1 million handsets in the quarter, giving the platform a 75% share of total worldwide shipments, while Apple’s 37.4 million devices put it at an increasingly distant second position at 17.3%. Microsoft’s Windows Phone, driven primarily by its partner Nokia (79% of all WP shipments), grew the most of all platforms, with a rise of 133.3%, but that still puts it at a single-digit share, 3.2% on 7 million devices shipped.

That meant that Microsoft has now overtaken BlackBerry, which declined by just over 35% with 6.5 million shipments, ending with a 2.9% market share.

Important to note that IDC specifies that this is devices shipped, not sold. Some analysts have told me that the two are effectively interchangeable terms, but shipped is also potentially a more optimistic figure: it points to how well retailers and carriers think certain models are likely to sell in the quarter ahead. Occasionally these can lag compared to how well certain handset makers are actually doing if a device ends up selling worse than expected.

What “shipped” numbers like IDC’s say is that Android and iOS continue to, more or less, remain the only games in town in terms of how confident sales channels feel about shifting devices, with other platforms relegated to niche status. This is something that companies like BlackBerry are trying to change, as evidenced by a recent deal to extend a $256 million loan to Telefonica for purchasing BlackBerry devices.

IDC’s numbers show that together these two platforms accounted for nearly 200 million units (199.5 million) shipped, up 59% over a year ago. The smaller players are not to be dismissed, though. Not only is Windows Phone the most rapidly rising of all platforms at the moment, but IDC notes that BlackBerry’s BB10 new range have hit 1 million shipped devices this quarter.

But turnaround will only come with that kind of growth being sustained. “Given the relatively low volume generated, the Windows Phone camp will need to show further gains to solidify its status as an alterative to Android or iOS,” writes Kevin Restivo, senior research analyst with IDC.

For the time being, the message to users, and to app developers, is that these are the platforms where you want to be. Considering how key content has been as a route to attracting users to these devices, that will continue to pose a challenge for the smaller players.

As with Strategy Analytics’ numbers yesterday detailing the profitability of different smartphone platforms in the quarter, IDC notes that Samsung is by far the “clear leader” in Android. It notes that it had a 41.1% market share. As a sign of the ongoing fragmentation of players on the platform, no other single OEM had more than a single-digit percentage market share after that, “and an even longer list of vendors with market share less than one percent.” The fact that it’s still “free” to license Android, and relatively easy to modify it for a more custom experience, will mean that it will continue to be the platform of choice for OEMs looking for more revenues from the ongoing boom in smartphones.

As we saw in Apple’s earnings earlier in the quarter, the company’s sales of iPhones are at an all-time high, but in comparison to the growth of the rest of the market, it’s actually off, with market share down nearly six percentage points. There is some feeling that part of this is due to the fact that the platform appears stale compared to all the change going on elsewhere with software and hardware features, news handsets and more. “Although demand remains strong worldwide, the iOS experience has remained largely the same since the first iPhone debuted in 2007,” IDC notes, pointing to a “massive overhaul” that appears to be on the cards with iOS 7.

IDC also notes that over the last year, shares of the biggest platforms have fluctuated, although Android’s current 75% is the highest in a year. Against that, the last time that Android approached 75%, in Q3 2012, Apple’s share was only 14.5% as people held out for a new iPhone model. That shows that Apple’s growth this quarter was at the expense of declines for other smaller platforms.

photo: flick
r

Smartphone/ OS Market share: Apple, Samsung, HTC...

It will be interesting to see how Samsung Galaxy S4 will impact second quarter market shares. See below results from first quarter 2013.





Ron
Insightful, timely, and accurate semiconductor consulting.
Semiconductor information and news at - http://www.maltiel-consulting.com/

comScore Reports March 2013 U.S. Smartphone Subscriber Market Share

Android Phone and iPhone Now Combine for 91 Percent of U.S. Smartphone User Base

http://www.comscore.com/Insights/Press_Releases/2013/5/comScore_Reports_March_2013_U.S._Smartphone_Subscriber_Market_Share

RESTON, VA, May 3, 2013 – comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released data from the comScore MobiLens service, reporting key trends in the U.S. smartphone industry during the three month average period ending March 2013. Apple ranked as the top smartphone manufacturer with 39 percent OEM market share, while Google Android led as the #1 smartphone platform with 52 percent platform market share.

Smartphone OEM Market Share

136.7 million people in the U.S. owned smartphones (58 percent mobile market penetration) during the three months ending in March, up 9 percent since December. Apple ranked as the top OEM with 39 percent of U.S. smartphone subscribers (up 2.7 percentage points from December). Samsung ranked second with 21.7 percent market share (up 0.7 percentage points), followed by HTC with 9 percent, Motorola with 8.5 percent and LG with 6.8 percent.

Top Smartphone OEMs 3 Month Avg. Ending Mar. 2013 vs. 3 Month Avg. Ending Dec. 2012 Total U.S. Smartphone Subscribers Age 13+ Source: comScore MobiLens
	Share (%) of Smartphone Subscribers
	Dec-12	Mar-13	Point Change
Total Mobile Subscribers	100.0%	100.0%	N/A
Apple	36.3%	39.0%	2.7
Samsung	21.0%	21.7%	0.7
HTC	10.2%	9.0%	-1.2
Motorola	9.1%	8.5%	-0.6
LG	7.1%	6.8%	-0.3

Smartphone Platform Market Share

Google Android ranked as the top smartphone platform with 52 percent market share (71.1 million subscribers), while Apple’s share increased 2.7 percentage points to 39 percent (53.3 million subscribers). BlackBerry ranked third with 5.2 percent share, followed by Microsoft (3 percent) and Symbian (0.5 percent).

Top Smartphone Platforms 3 Month Avg. Ending Mar. 2013 vs. 3 Month Avg. Ending Dec. 2012 Total U.S. Smartphone Subscribers Age 13+ Source: comScore MobiLens
	Share (%) of Smartphone Subscribers
	Dec-12	Mar-13	Point Change
Total Smartphone Subscribers	100.0%	100.0%	N/A
Google	53.4%	52.0%	-1.4
Apple	36.3%	39.0%	2.7
BlackBerry	6.4%	5.2%	-1.2
Microsoft	2.9%	3.0%	0.1
Symbian	0.6%	0.5%	-0.1

About MobiLens
MobiLens data is derived from an intelligent online survey of a nationally representative sample of mobile subscribers age 13 and older. Data on mobile phone usage refers to a respondent’s primary mobile phone and does not include data related to a respondent’s secondary device

1st Time Smartphones Outsold Feature Phones

The article below documents the fast pace of smartphones' growth and shows that for the first quarter of 2013, the sales of smartphones surpassed feature phones. Smartphone growth is driven by access to fingertip computing anywhere, anytime (see 2010 article Four Billion Cell Users : Computing Power Anytime, Anyplace).

between the five top vendors, Apple loss market share and had the smallest increase of growth between 2012 and 2013. This is due to the growth in emerging countries where the iPhone is too expensive relative to other smartphones. It is not likely that Apple will introduce an inexpensive iPhone in China considering the tough price competition it would face from the much cheaper Android phones. People in emerging countries are more price conscious. Apple will want to maintain its high quality brand and its higher pricing and is likely to repeat its Mac vs PC history see the 2008 story -Are iPhone and Android Smart Phones Repeating the History of Mac vs. PC in the 80s

The fast growth of smartphones in 2012 and 2013 by Huawei, ZTE, CoolPad, and other companies in emerging countries was made possible by the chips manufactured by MediaTek (see January story about MediaTek Apples' Cook in China (MediaTek Impact)).

Ron

Insightful, timely, and accurate semiconductor consulting.Semiconductor information and news at - www.maltiel-consulting.com

 

Smartphones outpace feature phones for first time ever

http://news.cnet.com/8301-1035_3-57581566-94/smartphones-outpace-feature-phones-for-first-time-ever/

by Jonathan Skillings , April 26, 2013 5:29 AM PDT

 

In the first quarter of 2013, smartphones accounted for more than half of phone makers' shipments worldwide. Samsung remained the top dog, but LG, Huawei, and ZTE all saw big gains.

LG returned to IDC's smartphone Top 5 in the first quarter of 2013 with record-high shipments, riding a strong interest in its LTE-enabled devices, including the Optimus G.

(Credit: Josh Miller/CNET)

It seemed inevitable, and now it has happened: for the first time ever, feature phones have taken a backseat to smartphones in terms of quantities shipped.

In the first quarter of 2013, device makers shipped 216.2 million smartphones worldwide, a volume that accounted for 51.6 percent of total global shipments and that marked the first time smartphones have claimed more than half of all quarterly shipments, according to market researcher IDC.

The smartphone market grew 41.6 percent compared with the first quarter of 2012, but declined 5.1 percent from the shipment tally for the fourth quarter of 2012. The first quarter of the year typically sees a slowdown, especially in comparison with the holiday-shopping-filled fourth quarter.

The first quarter saw a total of 418.6 million mobile phones -- both smartphones and the less-powerful feature phones -- shipped worldwide, IDC said Thursday.

"Phone users want computers in their pockets," IDC analyst Kevin Restivo said in a statement. "The days where phones are used primarily to make phone calls and send text messages are quickly fading away."

(Credit: IDC/Screenshot by CNET)

See more additional table and statistic about the whole mobile vendors

Apples' Cook in China (MediaTek Impact)

Apple is having hard time competing in emerging market due to MediaTek.

Apple CEO Cook Returns to China Amid Falling Market Share

The New York Times article below expands about MediaTek rise.

"Despite having reported record sales of the iPhone 5, the U.S. technology giant’s presence on the mainland flagged in 2012; it was pushed out of the top five smartphone makers in that market during the third quarter, with just 8 percent of the market, according to the research firm Canalys.

As Coolpad, Huawei, Lenovo, Samsung and ZTE surged ahead of Apple, a major force behind their success was MediaTek, a Taiwanese chip maker...entered the smartphone business late, introducing its first chipset in 2011 inside a Lenovo phone. But within a year and a half, analysts say, MediaTek has taken 50 percent of China’s market for smartphone chips.

That success has come with the adoption of what MediaTek calls a “turnkey solution.” Rather than simply provide a chip, the company also offers instructions on how to build a phone, the software architecture to run it and dedicated consultants to advise phone makers through the production process"

Ron
Insightful, timely, and accurate semiconductor consulting.
Semiconductor information and news at - http://www.maltiel-consulting.com/

Providing a Template to Challenge Apple

By LIN YANG, January 6, 2013

TAIPEI — In the China smartphone market, Apple has seen better days.

Despite having reported record sales of the iPhone 5, the U.S. technology giant’s presence on the mainland flagged in 2012; it was pushed out of the top five smartphone makers in that market during the third quarter, with just 8 percent of the market, according to the research firm Canalys.

As Coolpad, Huawei, Lenovo, Samsung and ZTE surged ahead of Apple, a major force behind their success was MediaTek, a Taiwanese chip maker whose products have drastically reduced the cost for manufacturers of getting new phones to market.

The company entered the smartphone business late, introducing its first chipset in 2011 inside a Lenovo phone. But within a year and a half, analysts say, MediaTek has taken 50 percent of China’s market for smartphone chips.

That success has come with the adoption of what MediaTek calls a “turnkey solution.” Rather than simply provide a chip, the company also offers instructions on how to build a phone, the software architecture to run it and dedicated consultants to advise phone makers through the production process. MediaTek’s chief financial officer, David Ku, describes this as a franchise model in which all the clients have to do is “turn on the burner.”

Peter Liao, an analyst at Nomura Securities who covers the industry, said MediaTek saved phone makers the often prohibitive cost of research and development.

“It typically takes a lot of money and time to develop a new handset model, but MediaTek comes in and provides a total solution,” Mr. Liao said.

The company has proved wildly popular among Chinese phone makers. Besides supplying Huawei, Lenovo and ZTE, MediaTek also supports lesser-known manufacturers, including those that make so-called bandit phones that imitate premium models from Apple, Samsung and HTC.

TCL Communication Technology Holdings, a Chinese phone maker that sells phones primarily in Europe and Latin America, uses MediaTek’s chips. Its chief operating officer, Wang Jiyang, said that when his company works with MediaTek, its only major design tasks are to make the software more user-friendly and to tailor the look and feel of the phone.
“In general, with MediaTek’s help, we’re able to achieve almost twice as fast time to market, compared to other solutions,” Mr. Wang said.

MediaTek was founded in 1997. It started out making chips for home entertainment electronics like DVD players and televisions before moving into components for CD and DVD-ROM devices. In 2004, it began making chips for small mobile phones.
MediaTek estimates that it will lead the Chinese market by selling 110 million smartphone chips in 2012, up from 10 million chips a year ago.
By comparison, Qualcomm, the global leader in smartphone chips, is expected to finish 2012 in second place in China with 82 million chips shipped, according to the research firm DigiTimes.
MediaTek has been powered by consumers like Zhang Ying, 31, who want to try the latest technology but not pay a premium for it. Mr. Zhang, a Shanghai resident, bought a knockoff HTC phone last year. “Every person has a price point,” he said. “At a time when some of my friends were buying Samsung or iPhone, I wanted to show that I can keep up with them. A lot of domestic phones are cheap and of fairly good quality.”
People who think like Mr. Zhang are dominating sales, especially among first-time smartphone buyers. In a September report, McKinsey, the global consulting firm, estimated that 69 percent of all smartphones sold in China would cost less than 1,500 renminbi, or about $240, by the second half of 2013.
And MediaTek is taking its business model to other emerging markets. The company’s products support features that are popular in developing countries, like noise-reducing speakers and slots for two SIM cards.
In India, local brands like Spice and Micromax are rolling out lower-priced smartphone models using MediaTek parts. In Brazil, phones by Motorola Mobility, as well as local brands like Gradiente and Multilaser, will also have MediaTek chips.
“The markets we target have 5.8 billion people, whereas the U.S. and Europe have less than one billion,” said Mr. Ku of MediaTek. “I need to aim at a global market, not just developed countries.”

MediaTek also released a chip last year for building basic smartphones that work in regions without mobile data networks. Users of these phones rely on Wi-Fi connections to download multimedia. These phones can cost as little as $50, or 312 renminbi.

Those chips now account for 40 percent of MediaTek’s smartphone chip sales, according to the company.

Mark Hung, an analyst at the research firm Gartner, calls the network-less chip one of the “fastest-growing smartphone segments,” as many consumers are looking to switch from their simple mobile phones to basic, low-cost smartphones.

“This is a fairly new phenomenon, and as you can expect, mostly in emerging markets, including China,” Mr. Hung said.

For now, Apple has signaled that it has no intention of competing on price. The iPhone 5, released in China on Dec. 14, cost 300 renminbi more than the two previous models, the iPhone 4S and 4, on their release days. More than two million units of the iPhone 5 were sold during its first weekend.

By contrast, Coolpad, Huawei, Lenovo, Samsung and ZTE have rolled out new phones with similar performance at a third of the iPhone 5’s price of 5,288 renminbi, and sometimes less.

“We believe that emerging countries should also be able to enjoy the use of information technology with the same computing power,” said Tsai Ming-kai, chief executive of MediaTek.

As the world’s largest market for smartphones, China is quickly becoming a bellwether for the progress of sales wars globally. The Chinese experience may show that any leading market position can be fickle, and new brands can appear seemingly out of nowhere to capture significant market shares.

Apple remains No. 2 in smartphone shipments worldwide after Samsung, but its position could be threatened as the competition expands to more consumers and more price points.

“Emerging economies are getting stronger,” Mr. Tsai said. “The industry dynamic is always evolving. Anything can happen.”