[SMM analysis] 5G mobile phone shipments account for more than 60% for seven months in a row. 2021 still drives the demand for lithium cobalt oxide.

SMM1 March 13: it is believed that according to data from Tongyuan, the domestic mobile phone market shipped 26.595 million units in December, down 12.6% from the same period last year. From January to December, the domestic mobile phone market shipped a total of 308 million units, down 20.8% from the same period last year.

In terms of 5G mobile phones, 18.2 million 5G mobile phones were shipped in the domestic market in December, accounting for 68.4% of mobile phone shipments in the same period, accounting for more than 60% for the seventh month in a row. In the first 12 months, 5G mobile phones shipped a total of 163 million units, accounting for 52.9%.

Source: Institute of Information and Communication

Compared with 2019, the proportion of 5G mobile phones increased significantly in 2020, mainly due to the decline in the price of 5G mobile phones. For example, on January 4, 2021, Qualcomm launched the Snapdragon 480 5G mobile platform for the middle and low end. The greatest significance of Snapdragon 480 is to promote the price decline of 5G mobile phones. Recently, a new Y-series Y31s has been launched on vivo's official website, which is equipped with Snapdragon 480 SoC, and starts at 1498 yuan. Jian Qin, vice president of China Mobile, predicts that the proportion of 5G phones will reach 80% in 2021, and the penetration rate of 5G in 1000 yuan phones will exceed 90% by the end of 2021.

The rapid development of 5G mobile phones will drive the lithium cobalt oxide market. According to SMM research, China produced 75000 tons of lithium cobalt oxide in 2020, an increase of 22% over the same period last year. The total demand for lithium cobalt materials in China's lithium battery industry increased by 16.9% in 2020 compared with the same period in 2019, mainly because the epidemic affected the increased demand for home work and entertainment, and the demand for 5G mobile phones was also driven. SMM believes that the popularity of 5G mobile phones in 2021 will continue to increase demand for lithium cobalt. With the increasing popularity of 5G communication base stations, the leading mobile phone suppliers have launched new 5G models one after another, with the increase in the average charge of mobile phones, and the year-on-year growth rate of consumer electronics demand for lithium cobalt ion batteries will become positive.

It is worth noting that the shortage of chip capacity may bring some challenges to the 5G mobile phone market. The rapid development of 5G promotes the demand for chips in mobile phones and base stations. At present, the production capacity of wafer foundry enterprises such as TSMC, Samsung, GE Core, United Power and SMIC continues to be full. Recently, MediaTek expanded its production of TSMC's 7nm process in the first quarter, while the flagship 5G processor Tianyu 1200 will also begin mass production. MediaTek's Tianji 1200 flagship processor will be manufactured using the 6nm process. MediaTek's projection volume in TSMC 7nm and 6nm reached 110000 in the first quarter of 2021.