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Component Suppliers See Growing Orders from Wearables and Automotive Electronics

Component Suppliers See Growing Orders from Wearables and Automotive Electronics

Orders for components and materials from manufacturers of consumer electronics products such as true wireless stereo (TWS) earbuds, wearables and smartwatches are starting to pick up, following the recovery of previously delayed end-market demand, according to upstream supply chain sources.

Suppliers also expect a surge in orders from the automotive electronics industry in 2021, as clients' inventory is gradually depleting, the sources added.

Many channel retailers have also been strengthening their deployments in Southeast Asia, and are developing new consumer products to meet local needs, providing new orders for materials and components.

But for the handset business, the situation may be different. Huawei is expected to see a sharp drop in smartphone shipments during the fourth quarter, amid US-China trade tensions, with many of its component suppliers possibly losing orders.

Overall, 2020 handset sales could decrease 10-15% year-on-year, with the penetration of 5G models having a chance to hit 20%, the sources said. Due to the decline, shipments of handset chips including fingerprint sensors, driver ICs, application processors (APs) are all expected to dip, promising fierce rivalry among chipmakers in the fourth quarter.

Tesla's mass shipments of its new electric vehicles (EVs) is likely to drive growth in the automotive electronics industry. While Tesla's volume shipments will not be sufficient to result in a full recovery in the automotive semiconductor industry, fourth-quarter 2020 will remain a critical period for the industry to get back on track, as most first-tier integrated device manufacturers (IDM) will have finished adjusting their inventory.

In the medium-to-long-term, as upcoming new energy or hybrid cars will all adopt third-generation materials or silicon-power modules such as IGBT, automotive semiconductor suppliers and packaging service providers are still expected to enjoy robust orders.


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