Fubon Securities Co (富邦證券) yesterday lowered its forecast for Pegatron Corp’s (和碩) earnings this year by 7.86 percent from its previous estimate, citing potentially lower demand for Apple Inc’s next-generation iPhone and iPad.
Pegatron is one of the major assemblers of Apple’s iPhone and iPad products.
The brokerage now expects the company to increase this year’s earnings by 44.15 percent to NT$8.79 billion (US$295 million), rather than the previous forecast of an increase of 56.3 percent to NT$9.54 billion, Fubon analyst Arthur Liao (廖顯毅) said in a report.
Pegatron reported NT$6.1 billion in net profit last year.
“Since both the new iPhone 5 and the low-priced iPhone are likely to retain a 4-inch display, we remain cautious about the sell-through of the low-priced iPhone in the future,” he said.
PROFITABILITY
As both of the new iPhone products may come out in 4-inch models, Apple is not likely to gain more market share in the smartphone market against larger-sized smartphones, which might also affect Pegatron’s profitability, Liao said.
Another reason that Fubon had decided to lower its forecast for Pegatron is because of the possibility of a delay in the launch of a second-generation iPad Mini.
Liao said Apple had planned to delay shipment of its new iPad Mini until the first quarter of next year, which means the product may enter mass production from February next year.
As a result, Fubon downgraded its rating on Pegatron’s shares to “reduce” from “add,” and lowered its target price for the stock to NT$43 from NT$58.
Pegatron shares closed up 1.94 percent in Taipei trading yesterday.
Meanwhile, the report said Apple might not be able to compete against Chinese smartphone vendors in the mid-end smartphone market, as the US company’s iPhone Mini might be priced between US$350 and US$400 each, about the same as that of typical high-end smartphone models in China.
‘WINNERS’
“We believe that large-scale players such as Lenovo Group Ltd (聯想) and Huawei Technologies Co Ltd (華為) will be the biggest winners in the low-to-mid-end smartphone market in China,” Liao said.
“Since the low-price iPhone will have a 4-inch display and the purchase policy of Chinese operators depends upon a larger display [at least more than 4.5 inches], we predict that Apple may revise down its fourth-quarter forecast,” he said.
“This would impact Pegatron’s sales momentum during the same period,” Liao said.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks