A slight yet promising uptick is on the horizon for smartphone application processor (AP) shipments to Chinese brands as we step into the first quarter of 2025. While typically an off-season, it’s anticipated that shipments will see a marginal 0.6% rise. This moderate increase comes as welcome news, suggesting that the seasonal downturns will not significantly impact the industry’s momentum.
Casting a glance back at the last quarter of 2024, the overall picture for smartphone AP shipments was much better than initially expected. Thanks to robust overseas demand for particular Chinese smartphone brands, the global shipment forecast was adjusted to around 180 million units, softening the anticipated decline to 5.5% from a steeper 7.7%.
Interestingly, as we look ahead, China’s policies appear pivotal in maintaining this stability. The country’s mobile phone subsidy policy is set to bolster the market, especially for mid-to-high-end 5G models that fall within the subsidy-friendly price spectrum. These models are poised to draw more consumer interest, which could provide a cushion against typical first-quarter slowdowns.
Furthermore, the imminent 618 Shopping Festival in the second quarter of 2025 is also playing a crucial role. Anticipating high demand during this shopping bonanza, manufacturers are stocking up on components, ensuring a steady demand for APs despite the seasonal ebb and flow.
In line with these factors, it is projected that AP shipments will remain level with the previous quarter, experiencing a modest 0.6% quarter-on-quarter increase and a more significant 7.2% growth year-on-year. These figures underscore a resilient market, bolstered by strategic timing, consumer policy incentives, and proactive inventory management by manufacturers. This stability spells good news for the industry, reflecting a nuanced balance between external demand and internal market strategies.
