With memory prices surging, global smartphone makers are drastically revamping their product shipment strategies, and a forecast has emerged that panel demand will decline.
On Mar. 5, market research firm TrendForce said it was found that this year's global smartphone panel shipments will fall 7.3% to 2.14 billion units from last year's 2.31 billion.
This marks the end of the growth cycle that had continued since 2023 and the first shift to an annual decline in years.
TrendForce said, "This year's smartphone panel procurement will be affected by a slowdown in the increase of new smartphone shipments," adding, "Panel demand is also weakening due to the price rise and supply shortage of memory, one of the core components of smartphones and a major expense share."
Smartphone makers have already begun adopting strategies to downgrade specifications or reduce shipments due to rising component prices.
Earlier, TrendForce forecast that this year's global smartphone production would decrease 10% year over year to 1.135 billion units.
There is also a possibility that smartphone makers will pass on part of the expense from higher memory prices to consumer prices.
At the same time, to maintain retail price competitiveness, they are expected to tighten supply chain expense management. TrendForce said this will translate into price pressure on major component suppliers such as display panel companies.
TrendForce noted, "The surge in memory prices is cited as the biggest uncertainty in this year's smartphone panel market," adding, "How manufacturers adjust product configurations and inventory strategies, and whether consumers respond to rising smartphone prices by opting for repairs or extending device use instead of replacement, will be the key variables that determine future market trends."
Meanwhile, the upward trend in memory semiconductor prices is expected to continue in the first quarter of this year.
TrendForce said, "In the first quarter, general-purpose DRAM prices will surge 90–95% from the previous quarter, and the average price, including general-purpose DRAM and HBM, will rise 80–85%."