Device vendors including Xiaomi, LG Electronics and Sony
have all expressed their intention to develop smartphone chips in-house.
Nevertheless, the average selling price for smartphone SoCs has been
trending down, while the cost of developing advanced chips using 10nm
and below process technologies is high.
Consequently,
these device vendors are being discouraged from developing their own
smartphone SoCs, and will be cautious about increasing adoption of
in-house developed chips in their own-brand smartphones, according to
market sources.
The decelerating global smartphone
market is another factor discouraging those device vendors' development
of chips particularly high-end ones in-house, said the sources. With the
industry heading towards sub-10nm nodes, the cost of developing
advanced chips is pretty high. Profits from selling devices may not be
able to offset the cost paid for the effort, the sources indicated.
Meanwhile,
despite being less optimistic about profits made from their in-house
developed chip businesses, Apple, Samsung and Huawei are gearing up to
introduce their next-generation products built using 10nm process
technology in 2017, the sources noted.
The smartphone
market growth has been decelerating in 2016. Among the first-tier
smartphone vendors, Apple could be the only one able to maintain its
usual profit growth in 2016, according to sources at Taiwan-based IC
design houses. Meanwhile, China-based Oppo and Vivo will continue to
improve their EPS while other brand smartphone firms will likely see
their earnings shrink or even suffer losses, said the sources.
http://www.digitimes.com/news/a20161201PD204.html
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