1. Chip shortage that the damage of the smartphone market because of the success
Analysis of the article said, cell phone chip supply can not meet the needs of the facts show that
the smart phone business is compromised by its own success. The article pointed out that the
chip shortages could lead to Apple, HTC and Samsung and other manufacturers of mobile phone
supply is restricted, this challenge is a barrier to the growth of the smartphone market.
Faster Verizon Wireless and AT & T wireless network running on the development of a
new generation of smart phones may be hindered, is a key component manufacturers can not
keep up with demand growth.
The world's largest cell phone chip maker Qualcomm said last month that the company can not
obtain a sufficient supply of the latest so-called baseband chips ". The largest contract
manufacturers in this industry, TSMC has said that the company needs to increase the number of
machines in order to keep up with the orders of the demand.
Qualcomm is a leading provider of LTE chip, this chip provides the fastest Internet access speeds.
This means that the chip shortages could lead to new phone vendors such as Apple, HTC and
Samsung supply is limited, this challenge is a barrier to the growth of the smartphone market.
According to data released by the Bloomberg industry, it is expected that the smartphone
product category will be created about $ 219 billion in revenue this year.
Market research firm Strategy Analytics analyst Sravan Kundojjala said: "This appears to be a big
problem, because Qualcomm is a single source in the LTE market, regardless of which company -
Korea, Japan and the United States, this market is very important - will face a shortage of supply
situation. "
iPhone and other smart phones are taking on more of the daily computing needs, while the LTE
network will give users faster Internet access speeds, and user-friendly Internet, downloading
applications and streaming video. This fourth-generation system is first introduced in
metropolitan areas will then be introduced in more areas worldwide. Apple's next-generation
iPhone is expected to be released later this year, analysts said this phone is likely to be run on a
faster network.
Support both LTE and legacy network
Like other companies, Apple also rely on Qualcomm LTE components, which is headquartered in
San Diego, is only capable of delivering the same time provide the LTE network and the old
network to connect the semiconductor chip manufacturers - According to market research firm
Strategy Analytics said semiconductor right to limit the number of chips in the phone, keep the
phone's tiny size and does not damage the battery life is essential. Therefore, this semiconductor
production for almost all new mobile phones will be released this year are to the key.
Kundojjala said: "Current only (semiconductor) market (with the practitioners of this ability) is

2. the high-pass, all other companies are catching up." He also added that this year's new LTE
baseband chip demand will be at least will reach 30 million, but Qualcomm's supply can only
meet half the demand.
Qualcomm CEO Paul Jacobs (Paul Jacobs), said the company is trying to cultivate other suppliers
to produce its chips, the goal is to meet the needs of all orders received by the company before
the end of the year. TSMC has increased spending in its factories, also plans to meet all orders, in
the fourth quarter.
Sharp rise in
Walter Price (Walter Price), a fund manager at RCM Capital Management, asset management
company, said: "(a shortage of high-pass component) is resulting in huge pressure on the industry
as a whole, this market is definitely rising rapidly.
The smart phone has replaced the PC business has become the engine of growth "of the
technology industry." According to data released by market research firm Gartner, it is expected
that in 2012 global smart phone shipments will reach 655 million, well above 299 million in 2010;
compared with the expected PC market at this stage. The growth rate is only about 5 percent to
368 million units.
Occupy a dominant position in PC chip market, Intel, Qualcomm, Broadcom and other smart
phones key semiconductor manufacturers have been outsourcing to create their own success.
Outsourcing vendors
But today, this strategy is to cause trouble, because chip makers can not keep up with demand.
TSMC and Asia, many other so-called "foundry" in the form of outsourcing contracts to
manufacture chips, but these companies have been unable to meet the production needs of a
large number of increasingly complex processors and baseband chips.
Chip production machinery supplier KLA-Tencor CEO Rick Wallace, Rick Wallace, said: "huge
demand for these companies to a large extent by surprise. They are in production capacity to
make progress, but from the need the standards achieved there is still a long way to go. "
TSMC occupies the leading position in this field means that the lack of UMC and
Globalfoundries and other alternative providers TSMC's competitors are facing the plight of hard
to keep up with the latest production technology. Credit Suisse analyst Randy Abrams, Randy
Abrams, said that even if the other outsourcing vendors also have the capacity and technology,
customers need up to nine months time to complete the move to a new supplier of technical
process.
NVIDIA with HTC

3. NVIDIA CEO Jen-Hsun Huang (Jen-Hsun Huang), said the company could not get enough of the
latest graphics chip supply from TSMC, where to meet demand. Jen-Hsun Huang said in an
interview last week, his own choice of production based on older technology, Tegra mobile phone
chips are pleased.
The pain from the chip shortage may not be fair to assume the smartphone vendors RCM fund
manager Price said, Apple and Samsung occupies the leading position in the smartphone market
is growing, they are more important for suppliers, so the parts supply to the top.
Richard H (Richard Ko), investment company KGI Securities analyst, said the fifth-largest smart
phone manufacturer HTC and other companies may suffer the greatest pain due to supply
shortages. He predicted that this quarter HTC smartphone shipments will be reduced by up to
two million. Richard Gao further pointed out that: "by a shortage of supply in the most advanced
in the field of smart phones, the HTC the leading position in the window of opportunity is getting
smaller." HTC declined to comment.
Apple and Samsung
Manufacturers as the best-selling smart phone iPhone, Apple also not immune to be a shortage
of supply. From Qualcomm in short supply situation has prompted the U.S. investment firm Piper
Jaffray Piper Jaffray, analyst Gene Munster (Gene Munster) expected launch date of the next
generation iPhone will be later than expected. Last month, Apple's stock price fell sharply within
10 days 10% supply shortage, in part because Qualcomm.
Cook on April 24, said: "We are working to expand very closely with supplier partners, to take any
measures that we can do to get the supply. Sometimes we succeeded, sometimes we will focus
committed to addressing the potential impact on our things, and try to press any button on the
control range to solve the problem. "
Samsung is not only a smart phone manufacturers, but also the world's second chip
manufacturers, and Apple from Samsung to buy chips. Compared with other smartphone
manufacturers, the two companies dependent on supply of high-pass is not strong, so the impact
may be smaller.
Flexibility
Samsung has already surpass Nokia in the last quarter, becoming the world's largest
smartphone maker, the company's smart phone components are produced. Samsung
smartphone shipments in the first quarter, a substantial increase of 267%, Apple rose 89 percent.
This compares with the other companies in the world's top five smartphone vendors in
shipments fell.
Samsung's e-mailed statement, said: "The strong relationship between the Samsung and a
number of suppliers has brought us the flexibility to respond quickly to changes in consumer and
market demand."

4. According to market research firm IDC, 1.5%, while smartphone shipments have increased
drastically to 43% decline in the overall mobile phone market, increasingly shows the importance
of the smart phone market. The smart phone in the overall mobile phone market share has more
than one-third of last year's first quarter compared to 25%.
Andrew Daly (Andrew Dailey,), a California company from MGI Research to study the supply chain,
Managing Director, said that the reason why chip vendors did not provide enough capacity,
because they do not believe that the smartphone maker said the market growth rate. He pointed
out: all from the bottom of my heart that, like the market and trees, the president of the
company not to break through the height of the sky. "