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Key Summaries from TrendForce's Annual Forecast 2021 Event

TrendForce today (Oct. 16) held its Annual Forecast 2021 event at the NTUH International Convention Center. Key summaries of the event can be found below.

Global mobile network operators will focus on network coverage and service expansion in 2021

As mobile networks see an increase in data transfer demand and support various emerging applications as well as service areas, 5G networks will need to provide bandwidth support for an enormous amount of data. Therefore, mobile network operators have been seeking partnership opportunities with third-party equipment suppliers to push 5G network as an open and interoperable standard, in turn minimizing the costs of mobile network equipment and ensuring that 5G RAN infrastructure develops towards a trend of “virtualization, high flexibility, open standard, and power conservation”. In an effort to raise the spectrum efficiency of 5G networks, 3GPP has proposed several solutions, the most prominent among which is DSS (dynamic spectrum sharing). Through DSS implementation, mobile network operators can deploy their 4G and 5G network within the same spectrum starting in 2021 and allocate spectrum resources between the two networks according to user demand. In addition to its low implementation cost, DSS technology has gradually become the key to mobile network operators’ 5G strategies because it allows operators to quickly achieve nationwide 5G coverage by activating their 5G networks in the 4G spectrum.

Camera-based DMS (driver monitoring systems) will undergo an explosive growth with a 92% CAGR over five years

In light of the string of traffic accidents in which the drivers ignored road conditions due to their overreliance on ADAS (advanced driver assistance systems), which have recently skyrocketed in adoption rate, the market is once again paying close attention to driver monitoring functions. In the future, the main thrust of driver monitoring functions will be focused on the development of more active, reliable, and accurate camera systems. By detecting the driver’s drowsiness and attention through iris tracking and behavioral monitoring, these systems are able to identify in real time whether the driver is tired, distracted, or driving improperly. As such, DMS have become an absolute necessity in the development of ADS (autonomous driving systems), since DMS must serve multiple functions simultaneously, including real-time detection/notification, driver capability assessment, and takeover of driving controls whenever necessary. Vehicles with DMS integration are expected to enter mass production in the near future. Driven by legislative changes and market demand, total DMS units equipped in vehicles are projected to undergo a 92% CAGR in the 2020-2025 period.

As a new climate emerges in the global IC design industry in 2021, total revenue is projected to grow by 5.4% YoY

Since the global spread of the COVID-19 pandemic has not shown any signs of slowing down, the corresponding stay-at-home economy is still driving the demand for networking and notebook products. At the same time, owing to continuous price drops of 5G smartphones and increasing infrastructure readiness, global smartphone shipment is expected to return to a state of growth, in turn propelling global IC design revenue to US$96.737 billion in 2021, a 5.4% increase YoY. On the other hand, as many chipmakers have already undertaken measures mitigating the risk posed by the China-U.S. trade war in the past two years, and the component demand generated by the pandemic has also made remarkable contribution to IC design revenue, the trade war will likely impact the industry to a minimal degree. In terms of AI development, after Nvidia released its A100 GPU for AI model training in May 2020, the company is expected to push out major product refreshes at a frequency of every two to three years. With Nvidia leading the charge, HBM technology will dictate the future relationships between IDMs, foundries, and OSAT (outsourced semiconductor assembly and test) companies.

The server market will welcome the new normal in the post-pandemic era in 2021

5G commercialization will not only revitalize the data center industry and galvanize a wave of growth in micro data centers and edge computing, but also become the primary focus of the data center industry from 2021 to 2025, being utilized across IoT and V2X applications. However, as the industry restructures and server computing power improves on a large scale, the development of server applications will trend towards use cases that are drastically different from traditional, existing ones, in turn further driving up the data center industry’s server demand. In particular, global data center build-outs have become the primary driver of DRAM bit demand in recent years, with server DRAM accounting for more than 50% of total DRAM bit consumption and more than 30% of DRAM bit shipment.

5G smartphone production will likely exceed 500 million units, with an almost 40% penetration rate

Under the assumption that the COVID-19 pandemic will slow its pace in 2021, smartphone production next year is expected to exceed this year’s total of 1.24 billion units. Brands will continue to refine and optimize existing smartphone functions as opposed to delivering innovations in terms of appearance and overall design. The focus of the smartphone industry will revolve around 5G, and as mobile processor manufacturers expand their 5G offerings from the high-end to the entry-level and mid-range segments, global 5G smartphone production will likely exceed 500 million units, with an almost 40% penetration rate. However, given that the global coverage of 5G base stations will be unlikely reach 50% until 2025 at the earliest, the arrival of the high-speed, high-bandwidth era may take place even later.

As the supply and demand of large-sized panels nears equilibrium, the penetration rate of OLED panels in smartphones will skyrocket

Korea-based SDC is confirmed to make its exit from the large-sized LCD market due to its inability to compete against Chinese panel makers and their superior production capacities. After SDC’s departure, Chinese panel makers will account for nearly 60% of total global panel capacities, thereby forming an oligopoly in the industry. On the other hand, the stay-at-home economy generated by the COVID-19 pandemic led to an increase in TV and notebook demand, which resulted in a 30% QoQ spike in TV panel demand in 3Q20. However, the influx of additional panel capacities from Chinese companies also means that the glut ratio of large-sized panels is projected to rise from 0.8% this year to 2.8% in 2021. Whether panel quotes will remain in an upswing therefore remains to be seen. Furthermore, the penetration rate of OLED displays in smartphones is expected to grow from 33% in 2020 to 38% in 2021, owing to factors such as the continued intensification of the China-U.S. trade war, the reorganization of the smartphone panel supply chain brought about by sanctions against Huawei, disparities in the demand for various panel types, and the widening shortage of TDDI. In this light, LCD manufacturers will face growing challenges in expanding or maintaining their market shares.

Yearly AR glasses shipment is projected to exceed 10 million units in 2024 thanks to 5G network development

AR glasses will move towards a smartphone-connected design in 2021 in which the smartphone serves as the computing platform for the glasses. This design allows for significant reduction in cost and weight for AR glasses. In particular, as the 5G network environment becomes more mature in 2021, the integration of 5G smartphones and AR glasses will enable the latter to not only run AR apps more smoothly, but also fulfill advanced personal audio-visual entertainment functionalities through leveraging the added computing power of smartphones. As a result, smartphone brands and mobile network operators are expected to venture into the AR glasses market on a large scale in 2021. As the AR industry attracts more companies to enter the field in 2021, the AR glasses market is projected to exhibit considerable growth going forward, reaching a yearly shipment of 11.5 million units in 2024.

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