Demand for cheap smartphones to benefit Taiwanese suppliers

Increasing global demand for cheap smartphones in emerging markets, including China, is expected to result in a third-quarter growth for Taiwanese suppliers in the ecosystem.

The increasing global demand of cheap smartphones in emerging markets, including China, is expected to boost growth in the third quarter for Taiwanese suppliers.

According to a report Saturday by Taiwan's state-run Central News Agency, handset manufacturers benefiting from this growing demand include Hon Hai Precision Industry, Advanced Semiconductor Engineering (ASE), Siliconware Precision Industries (SPIL), Chipbond Technology, Kinsus Interconnect Technology, and TXC.

Citing studies by the Market Intelligence & Consulting Institute (MIC), a division of Taiwan's quasi-official Institute for Information Industry (III), the report said increasing demand for cheap smartphones in emerging markets , including China, would help Taiwan's IC packaging industry grow by 7.3 percent in 2013, reaching a total output value of 373.1 billion Taiwan dollars (US$12.7 billion).

MIC experts said Apple would continue to rely on Taiwanese suppliers and the launch of a cheaper iPhone to expand its smartphone market share would help boost the profit of Taiwanese suppliers. The report added that Hon Hai's fourth-quarter performance would be further boosted by anticipated orders of iPhone 5c, tablets, as well as those from other market players.

In terms of the IC (integrated circuit) packaging, the report said sales of ASE might increase by 25 percent in the third quarter due to increasing demand of its Wi-Fi modules needed in cheap smartphones manufactured for certain U.S. brands.

Third-quarter 2013 performance of SPIL is expected to surpass its record sales in third-quarter 2007, growing to 7 percent from 5 percent in the previous quarter this year. 

Due to the boosted demand of cheap smartphones and Xiaomi's "Hongmi" (which means "red rice" in Chinese) in China, the report added that Taiwan's Chipbond Technology would perform well in the sales of its chip-on-glass (COG), used to bind ICs and panels.