Affected by the lackluster demand in the end-user market and branded vendors' conservative attitude towards launching new products, Taiwanese contract manufacturers, who mostly rely on Japanese DSC branded vendors' orders, saw a 5.8% year-on-year decline in shipment volume, to around 4.5 million units, in the fourth quarter of 2013. Overall, shipment volume of the Taiwanese DSC industry totaled around 23.1 million in 2013, down 45.7% against 2012.

The growing threat of smartphones has prompted many Taiwanese contract manufacturers to transform themselves and upgrade their manufacturing capability in order to secure orders for high-end models, like DSCs with Wi-Fi (Wireless Fidelity) connectivity. In the fourth quarter of 2013, thanks to the increased shipment volume share of high-end models, the Taiwanese DSC industry managed to have a slightly less severe decline in shipment value compared to that in shipment volume, reaching around US$301.6 million, down 45.1% year-on-year. Overall, the industry's shipment value plummeted 40.7% year-on-year to around US$1.5 billion in 2013.

Figure I: Taiwanese Digital Still Camera Shipment Volume, 1Q 2012 - 4Q 2014 (Source: MIC, March 2014)