TOKYO -- Chinese companies are continuing to expand their presence in the race for dominance in global high-technology markets with a boost from robust domestic demand, according to a Nikkei survey. China is now chasing the U.S. after topping Japan in the number of sectors in which it has taken top market share.
In 2019, China posted the largest market share in 12 sectors, including electric components, up two sectors from the previous year to rank in the second position after the U.S.'s 25 sectors. The Asian giant managed to capitalize on its cost competitiveness to narrow the gap with the U.S. despite their trade conflict.
The survey, which covers 74 high-tech products and services, calculated and compares the market share of each one in 2018 and 2019 based on the estimates of various research organizations.
Chinese companies overcame Japan to take the largest market share in mid- and small-sized liquid crystal display panels used in smartphones and key insulator components for lithium-ion batteries that power smartphones and electric vehicles. BOE Technology Group overtook Japan Display in LCD panels, while Shanghai Energy New Materials Technology bested Asahi Kasei in insulator components, which have a decisive impact on the performance of lithium-ion batteries.
In personal computers, Lenovo Group posted a market share of 24.2%, up 1.2 percentage point from 2018, to take sole possession of the top spot it had shared with HP of the U.S.
Huawei Technologies maintained its momentum despite a de facto U.S. government ban on American exports to the Chinese telecom company. The Nikkei survey shows it took second place in the smartphone market, expanding its share to 17.6%, up 2.9 percentage points, surpassing Apple for the first time and narrowing the gap with top-ranked Samsung Electronics of South Korea.
During the most recent April-to-June quarter, Huawei had a market share of 20%, up 2.3 percentage points from the same period last year, according to research company IDC, ascending to the global top spot for the first time on a quarterly basis.
Five years ago, Samsung and Apple held a combined 39% of the global smartphone market, whereas Huawei only accounted for about a 5% share. In 2019, Huawei, Xiaomi and Oppo -- all from China -- had a combined 35% share in a sign of the changing lineup of main players.
Huawei also holds the largest market share in base stations for mobile phones. It gained an extra 5 percentage points in 2019 to dominate one-third of global shipments.
The company is also expanding to emerging countries that are investing in fifth-generation, or 5G, cellular network technology, with the U.S. and its allies growing wary of the move.
Certain products saw a direct headwind from the prolonged U.S.-China conflict. In routers, for example, top market-share holder Cisco Systems of the U.S. widened its lead over second-ranked Huawei by about 5 percentage points to 64.7%.
The outlook for China remains dim as the administration of U.S. President Donald Trump is set to continue with its all-out crackdown on the country throughout the rest of 2020, increasing pressure on the U.S. and Europe to abandon Chinese smartphones and security cameras. Such developments may increase headwinds for China in 2021, making it difficult for the country to procure high technology components.