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Smartphone AP Revenue Grew 21% In Q1 2021, Reach $6.8 Billion


According to research firm Strategy Analytics, the global smartphone applications processor (AP) market registered double-digit year-on-year (YoY) growth in terms of both shipment and revenue in Q1 2021. The revenue reached $6.8 billion in the first quarter of the year, up 21 percent from the same period last year. Qualcomm, MediaTek, Apple, Samsung, and HiSilicon (Huawei subsidiary) were the top five vendors, in that order.

Except for Huawei, all other firms in the top five saw shipment and revenue growth in Q1 2021. Qualcomm and MediaTek, in particular, benefitted the most from Huawei’s demise. Both companies reportedly registered double-digit revenue growth during the first three months of the year. Qualcomm now sits at the top with a 40 percent revenue share. MediaTek distantly follows the American company with a 26 percent share. Apple comes third with a 20 percent share of the overall revenue.

UNISOC, a Chinese fabless semiconductor company, also registered a YoY growth in shipment and revenue this past quarter. If it maintains this growth for the new few quarters, it could leapfrog HiSilicon in the smartphone AP market.

Huawei’s challenges are well known and it reflected in HiSilicon’s smartphone AP shipments in Q1 2021. The Chinese company suffered an 88 percent decline in shipments during the period between January to March this year. This concerning report comes amid speculations that Huawei could spin-off HiSilicon to save its chip business.

If you remember, the company sold its smartphone sub-brand HONOR in November last year to a consortium of over 30 companies. This move allowed HONOR to continue operating its smartphone business as before, without losing access to Google Mobile Services. It now remains to be seen whether Huawei does the same with its chip-making sister firm HiSilicon.

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Entry-level 5G solutions drove the smartphone AP growth in Q1 2021

Thanks to newer entry-level 5G solutions, the transition from 4G to 5G was faster than before in Q1 2021. According to the new report, 5G APs accounted for 41 percent of total smartphone APs shipped during this period.

The likes of Qualcomm’s Snapdragon 480 and MediaTek’s Dimensity 700 allowed smartphone manufacturers to lower the 5G price point this year. Strategy Analytics expects this 5G momentum to continue for the rest of the year as the next-gen wireless connectivity becomes the standard on smartphones.

“The growth momentum will continue through 2021, driven by an increased mix of 5G-attached APs and post-pandemic demand. Strategy Analytics, however, cautions that smartphone AP vendors need to maintain healthy average selling prices (ASPs) and optimize their cost structure in light of increasing chip development costs and foundry capacity constraints,” said Sravan Kundojjala, an Associate Director at Strategy Analytics.

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