Semiconductor shortage is hitting the smartphone industry globally with shipment now expected to grow only 6 per cent instead of 9 per cent as previously forecasted, according to research firm Counterpoint.

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The semiconductor shortage seems to have affected all brands in the ecosystems, including players like Samsung, Oppo and Xiaomi, while Apple seems to be the most resilient and least affected, Counterpoint said.

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According to Counterpoint Research's latest Global Smartphone Quarterly Shipment Forecasts, total units shipped in 2021 are expected to grow by only 6 per cent annually to 1.41 billion units. Counterpoint had previously projected 9 per cent annual growth to 1.45 billion units.

"The smartphone industry was set for a strong rebound this year after COVID-19 had hit the market hard in 2020. Smartphone vendors placed large component orders from the end of last year, and consumer demand coming from delayed replacement purchases buoyed the market in the first quarter," Counterpoint said.

However, some smartphone OEMs and vendors are reporting they had only received 80 per cent of their requested volumes on key components during second quarter of 2021, and the situation seems to be getting worse as one moves through the third quarter, it added.

"Some smartphone makers are now saying they are only receiving 70 per cent of their requests, creating multiple problems. Counterpoint Research believes 90 per cent of the industry is affected and this will impact the second half forecast for 2021," it said.

Semiconductor shortages had been plaguing the market since the fourth quarter of 2020, but the smartphone industry had managed to grow despite shortages in components like DDIs (display drivers) and PMICs (power management IC).

This was done by advanced planning and order placing along with hoarding of certain components like Application Processors (AP) and camera sensors which are typically of much higher value than DDIs or PMICs , Counterpoint said.

Semiconductor shortages continue and despite foundries running at full capacity for several quarters, the smartphone industry is being affected. Components that were once fully stored in the warehouse are bottoming and new components are not coming as requested, it added.

The semiconductor shortage seems to affect all brands in the ecosystems. Samsung, Oppo, Xiaomi have all been affected and we are lowering our forecasts. But Apple seems to be the most resilient and least affected by the AP shortage situation, Tom Kang, Research Director at Counterpoint Research, said.

India, which is among the biggest smartphone markets globally, is also likely to see an impact on account of the shortage.

According to industry experts, the festive season this year is likely to see fewer launches by smartphone companies and prices of existing devices could rise by 7-10 per cent. However, various companies have said they are ensuring that there are no supply challenges during the festive period.