Samsung "empathy and love" Wingtech Technology is expected to re-enter the mobile phone ODM throne

Recently, Samsung's 2022 orders for mobile phone ODM (original design manufacturing) manufacturers have been released, with a total of about 60-70 million units, and Wingtech Technology and Huaqin Technology will benefit, of which Wingtech Technology or will get about 40 million units of orders.

Samsung gets more profits with ODM

It is understood that Samsung closed its mobile phone manufacturing plants in Tianjin and Huizhou, Guangdong province in 2018 and 2019. From 2019 onwards, the production of Samsung mobile phones will be transferred to India and Vietnam, and ODM orders for 60 million low-end mobile phones will be released, which will benefit the performance of the Samsung mobile phone market.

According to IDC data, Samsung mobile phones shipped 267 million units worldwide in 2020, of which 73.9 million units were shipped in the fourth quarter, an increase of 6.2% year-on-year. For the growth of Samsung mobile phone shipments, IDC believes that this is mainly due to the better market performance of the low-end Galaxy A series. According to Samsung insiders, 6,000 of Samsung's total shipments of about 300 million units in 2020 will be handed over to Chinese ODM companies, and almost all of these 60 million ODMs are Galaxy A series models.

Industry experts told the "China Electronics News" reporter that Samsung closed its own mobile phone factory to choose ODM enterprises + Vietnam india production, mainly to reduce production costs. Among them, Samsung's choice of Vietnam and India for mobile phone production can further reduce labor costs; "Compared with traditional mobile phone brand manufacturers, ODM manufacturers have obvious advantages in cost control, supply chain management, manufacturing capabilities, and delivery time." Yang Jungang, senior analyst of CCID Consulting Integrated Circuit Industry Research Center, told China Electronics News. Mainstream Android brands have a certain proportion of ODM orders, ODM manufacturers can help Samsung achieve lower prices for low-end models, and then achieve more profits.

The ODM business will continue to grow

It is understood that Wingtech Technology, Huaqin Technology, Longqi Technology is recognized as the "three giants" of mobile phone ODM, Counterpoint data shows that the total ODM market share of the three manufacturers accounts for nearly 80%.

Originally, Wingtech Technology has been in a leading position in market share, and in 2020, Samsung ODM orders will be released to Huaqin, pushing Huaqin to the throne of ODM market share. Counterpoint data shows that according to the statistics of shipment caliber, in 2020, Huaqin surpassed Wingtech for the first time to become the first in the mobile phone ODM/IDH (independent design company) industry, with a market share of 34% and shipments of 162 million units. With 29.4% of the amount, Samsung became Huaqin's largest customer in 2020.

The choice of Samsung to release more orders for ODM in 2022 to Wingtech Technology will impact the competitive pattern of ODM, and Wingtech Technology is expected to return to the first throne of ODM.

"There may be fine-tuning of the ranking of ODM giants in the short term, but the overall ODM will still grow." Industry experts say. In the competition of mobile phone stock market, ODM manufacturers have the advantage of fast, large-scale and low-cost production, and the market penetration rate of ODM mobile phones has been growing in recent years. According to market consulting agency Counterpoint data, the proportion of smartphones manufactured in the ODM/IDH mode in the world rose from 25% in 2016 to 36% in 2020, or will reach 40% market penetration in 2025.

Zhang Xuezheng, chairman of Wingtech Technology, earlier revealed that even in the case of the overall decline of the mobile phone industry, the company's ODM business is still maintaining rapid growth.

Yang Jungang also believes that the current growth of ODM manufacturers in the field of smart phones will continue for a period of time, and now the business of ODM manufacturers is also expanding from mobile phone business to tablets, IoT, wearable devices, intelligent robots, automotive electronics and other fields, and the market space in these areas will be further released in the future, which will enhance the overall level of ODM business manufacturers.

In order to alleviate the tight production capacity of Wingtech Technology's communication business, Wingtech Technology is also actively expanding production, and in July this year, Wingtech Technology's fifth factory in the world- Wingtech Technology Kunming Intelligent Manufacturing Industrial Park, was officially put into operation, with an annual production capacity of 20 million units in the first phase and an annual production capacity of 30 million units in the second phase. In addition, the company's Jiaxing and Wuxi plants are also expanding production.