April 13, 2024


Unlimited Technology

2021 smartphone production being hit hard by chip shortage

A new market intelligence report says that 2021 smartphone production is being hit hard by the global chip shortage, and that means growth will be significantly slower than expected.

iPhone production is faring better than other brands, but is still being slowed – with iPhone 13 cameras a particular issue …


A global chip shortage has been brought about by a combination of three factors. First, a steep increase in demand for chips as a result of increasing use within the automotive sector. Second, production disruption caused by the pandemic. Third, the long lead time involved in bringing new chip fabrication capacity online, meaning that chipmakers cannot quickly boost production to meet demand.

Apple’s buying power and supply chain expertise means that the company is able to negotiate priority supplies a long way in advance, insulating itself from much of the disruption. However, the company warned investors that its own production is not immune, and that Mac and iPad would be hit first, followed by iPhone.

We saw examples of the two sides of the equation just yesterday, with Taiwanese camera component suppliers prioritizing Apple, while camera module assembly was slowed in Vietnam. Camera components appear to proving a particular challenge.

2021 smartphone production being hit hard

Counterpoint says that things were looking good earlier in the year, but not so much now.

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.

However, some smartphone OEMs and vendors are reporting they had only received 80% of their requested volumes on key components during Q2 2021, and the situation seems to be getting worse as we move through Q3 2021. Some smartphone makers are now saying they are only receiving 70% of their requests, creating multiple problems.

Counterpoint Research believes 90% of the industry is affected and this will impact the second half forecast for 2021.

The company says the market is still growing, but has downgraded its 2021 smartphone shipment forecast.

According to Counterpoint Research’s latest Global Smartphone Quarterly Shipment Forecasts, total units shipped for 2021 are expected to grow by only 6% annually to 1.41bn units; Counterpoint had previously called for 9% annual growth to 1.45bn units.

The hit to Apple is likely to be less severe than most of its competitors, however.

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