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Due to bad weather, production of 5G smartphones will decrease by 30%

TrendForce forecast for total smartphone shipments this year remains unchanged

Samsung’s Line S2 factory in Austin, Texas suffered from power outages and was forced to suspend operations in mid-February. Having studied the situation and its possible consequences, TrendForce specialists believe that the utilization rate of production capacities at this enterprise will not return to normal levels (over 90%) until the end of March. Meanwhile, here Samsung manufactures several types of products that are critical for the production of smartphones. Specifically, these are radio frequency chips (RFICs) required to support 5G networks, ordered by Qualcomm. They account for 30% of the monthly productivity of Line S2.

5G smartphones
5G smartphones

Due to bad weather, production of 5G smartphones will decrease by 30%

Qualcomm supplies these chips to smartphone manufacturers. In addition, they are used in 5G access points and modems. Samsung’s business outage is expected to result in a 30% reduction in 5G smartphone shipments in the second quarter.

At the same time, TrendForce expects this incident to reduce shipments of all smartphones in the second quarter by only 5%, given the existing inventory of components and the assumption that smartphone manufacturers will likely be able to maintain total production by increasing production of 4G models.

TrendForce’s forecast for total smartphone shipments this year remains unchanged. Analysts expect 1.36 billion devices to be shipped in 2021. However, the forecast for the share of 5G smartphones in 2021 has been reduced from 38% to 36.5%.

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