|I don't think that China will be an issue for at least a few years, if ever. This is a report from a Korean investment firm that makes periodic visits to other parts of Asia.|
IT Hardware: Key Takeaways From Our Recent Visits To Taiwan/Japan
Dec. 19, 2017 10:25 AM ET
About: Samsung Electronics Co., Ltd. (SSNLF), Includes: AMD, AMZN, AUO, BABA, BIDU, CHA, CHL, CHU, GOOG, HIMX, HTHIY, HXSCL, INPRF, INTL, LGEAF, MRAAY, QCOM, SHCAY, TCEHY, TOSBF, TSM, TTDKY, TYOYY, UMC
Hyundai Motor Investment & Securities
- Chinese chipmakers’ threat limited; iPhone X production volume 65mn units until 1Q18.
- Chinese Android phone makers to introduce 3D sensing technologies in 2018.
- In order of preference: Samsung, SEMCO, Innotek, LGE, Hynix.
Chinese chipmakers’ threat limited; iPhone X production volume 65mn units until 1Q18 We visited major IT H/W companies in Taiwan and Japan from November 19 to 22 to examine key issues facing the industry. After our visits, we found that only YMTC has potential to pose a viable threat in the long term among Chinese chipmakers and its initial produce is 32-layer 3D NAND flash; other DRAM makers such as Innotron and JHICC did not look like they would pose any significant threat as Innotron has IP issues and JHICC’s products are mostly tailored to the niche market.
We also found that the production yield of the iPhone X has greatly improved, with the 4Q17 production volume amounting to 27mn units and 1Q18 volume 37mn units (65mn in total). Finally, we expect NAND prices to stabilize in 2H18 after corrections in 1H18 and DRAM to remain undersupplied.
Chinese Android phone makers to introduce 3D sensing technologies in 2018 Although major MLCC manufacturers move to expand their MLCC capacity, we believe MLCC prices will continue to rise until 2019 on the back of soaring demand for automotive electronics and high capacitance MLCCs. We also believe the use of 3D sensing modules, under development through a technological alliance between Qualcomm ( QCOM) and Himax ( HIMX), will increase considerably from 1H18 led by Chinese smartphone makers.
In the order of preference: Samsung ( OTC:SSNLF), SEMCO, Innotek, LGE ( OTC:LGEAF), Hynix ( OTC:HXSCL) Despite KRW strength, we expect earnings momentum for IT H/W names to continue into 2018 thanks to ASP hikes and growing capacity per device. We especially expect 1Q18 to benefit from increasingly favorable investor sentiment stemming from the launch of the Galaxy S9 and improving yield of the iPhone X. We like Samsung Electronics best, followed by SEMCO, LG Innotek, LG Electronics, and SK Hynix.
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