Core component specification of global market-driving mid-range and low-end smart phones are getting upgraded. The trend is on to increasingly use in-house application processors (APs) and also increasing is NAND and DRAM memory capacity. Additionally, components such as fingerprint sensor, NFC, etc. are driving growth of low-end and mid-range phone markets. Adoption rate of large displays with over 5-inch size is increasing with Chinese companies at the center of the trend.

The projection on specific mobile-phone component trend was provided by 2016 Market Briefing Report recently prepared by Korea Semiconductor Industry Associations (KSIA) and GfK, the global market research company.

 
 ▲In-house AP adoption rate by Samsung, Huawei and Xiaomi (Source: Gfk research)

As Samsung and Huawei take lead in in-house AP adoption trend, Qualcomm’s dominance on global AP market is expected to be affected in some way or another. In-house AP adoption rate for Samsung is expected to reach up to 37% in 1Q 2016 while, for Huawei, it is likely to reach up to 45% in 2Q. This trend is translating into sales deterioration of Qualcomm APs.

Major AP companies taking lead in shift to 14/16 nm nodes

AP technology roadmap predicts expansion of mid-range APs with 14/16nm nodes expanding in 2Q 2016. Though 28nm node still dominates the market, newly launched APs such as Snapdragon 820 from Qualcomm, Exynos 8890/7870 from Samsung, A10 from Apple, etc. are driving trend for shift to 14/16nm nodes. Sean Weng, Senior Market Researcher at GfK, predicted that “because of major AP vendors’ product roadmap, 28nm node is likely to remain a mainstream in low-end market for a long while. However, 20nm node is expected to be replaced by 14/16nm node in high-end market.” 

Fingerprint sensor and NFC are emerging growth drivers

Owing to ever escalating competition among companies, penetration rate of fingerprint sensors in major mid-range phone markets is projected to reach 51% by the end of 2016. Mid-range and low-end market is expected to drive introduction of fingerprint sensors.

 
▲Fingerprint sensor’s penetration rate in mid-range and low-end phones (Source: Gfk research)

Spurred by increasing demand from such mid-range smart phones as Chinese brands and Apple’s iPhone SEs, adoption of NFC, mainly used as a wireless payment method, is expanding, too. Sean Weng expects that “demand for NFC will increase as such Chinese brands as Xiaomi and Huawei build in NFCs into their new strategic models. Thus, NFC will show growth in mid-range segment this year.”

Increasing display size and memory capacity

Smart phone’s display size is expected to increase especially to the range of 5.5 inches to 7 inches. Market dominance of FHD (UXGA) is increasing with expansion of Vivo X6 and 720HD is also increasing its market share thanks to Xiaomi’s Redmi 3.

According to Sean Weng, market share of 16/32/64GB NANDs for mobile phone will be increased in 2016, though falling demand for high-end phones will reduce overall demand for NAND. Meanwhile, market demand will be increased for DRAM with over 2GB capacity, predicted GfK.