Catcher Technology Co (可成科技), which makes metal casings for Apple Inc’s MacBook Air notebook and iPad mini tablet, is likely to receive new smartphone orders early next year, Barclays Capital Securities Taiwan Ltd said.
The new orders will be for Apple’s new iPhone 5S and Samsung Electronics Co’s premium Galaxy series during the first half of next year, Barclays analysts led by Dale Gai (蓋欣山) and Kirk Yang (楊應超) said in a note released on Thursday.
Catcher, which also supplies metal casings for HTC Corp’s (宏達電) smartphones, is likely to benefit from the growing trend of leading smartphone vendors adopting metal casings in their phones. So far, Samsung is the only top-five smartphone brand which is not using metal casing for its products.
Photo: Bloomberg
However, that could change. South Korea’s Electronic Times newspaper reported on Aug. 30 that Samsung might build a production line at its plant in Gumi, about 260km southeast of Seoul, to produce handset casing from magnesium and aluminium by the end of this year. The world’s largest smartphone brand is likely to apply metal casing to its premium models set to be released early next year, according to a report on the paper’s Web site.
In their note, Barclays analysts said that based on their checks with supply chain companies,
Samsung is close to a final decision on the adoption of metal casings in at least one of its high-end smartphone models from the second quarter next year.
“Our checks suggest Catcher has been qualified as one of the major sources on the total metal casing smartphone volumes at 10 [million to] 30 million next year from Samsung,” the analysts wrote.
“The final order allocation is to be confirmed in early first quarter 2014, subject to price bids by approved vendors,” they added.
Pauline Chen (陳柏齡), an analyst at Credit Suisse AG’s Taipei securities branch, said in a note to her clients on Sept. 4 that if Samsung decides to use metal casing for its flagship model next year, it is very likely to outsource some orders to non-South Korean suppliers in order to meet the requirements for volume and quality.
Chen said Catcher could also gain more orders from Apple next year as the US company is likely to adopt a new strategy to add new electronics manufacturing service (EMS) providers, including Wistron Corp (緯創) and Inventec Corp (英業達), to reduce risks for new products.
“We believe that the news should be positive for independent metal casing suppliers such as Catcher or Ju Teng International Holdings Ltd (巨騰) as these ‘new’ EMS suppliers could prefer to team up with independent casing makers, over their competitors’ casing subsidiaries,” she wrote.
Moreover, Catcher’s increased iPhone orders could help it offset the order losses from HTC, according to Barclays analysts, who predicted a 20 percent annual sales decline for HTC next year from this year.
“The increasing likelihood that Catcher will see iPhone 5S order gains in the first half of 2014 will likely completely offset HTC-related risks,” they said.
Shares of Catcher closed at NT$155 on Wednesday. Barclays reiterated its “overweight” rating on the company’s shares, with a target price of NT$179.
WALKING AWAY: At one point the world’s No. 3 smartphone brand, LG has fallen from a position as a market leader after a series of software and hardware mishaps South Korea’s LG Electronics Inc is to wind down its loss-making mobile division after failing to find a buyer, a move that would make it the first major smartphone brand to completely withdraw from the market. Its decision to pull out will leave its 10 percent share in North America, where it is the No. 3 brand, to be gobbled up by Samsung Electronics Co and Apple Inc with its domestic rival expected to have the edge. “In the United States, LG has targeted mid-priced — if not ultra-low — models and that means Samsung, which has more mid-priced product lines than
SHORTAGE: The city government said it would install water purification machines to provide drinking water to residents and would close all public swimming pools Officials, residents and businesses in Taichung have been gearing up for water cuts that are to take effect tomorrow as Taiwan deals with a water shortage. The water supply to large parts of Taichung as well as parts of Miaoli, Changhua and Hsinchu counties is to be cut on a rotational basis for two days a week, affecting an estimated 1 million customers, the Water Resources Agency said. It is the most stringent water rationing measure introduced in central Taiwan in nearly 50 years, Taiwan Water Corp (台灣自來水) official Lin Yi-hsiung (林義雄) said. The Taichung City Government said in a statement that
SPECULATION: The integrated house and land transaction income tax has been amended as the real-estate market heats up because of high liquidity and low interest rates Lawmakers across party lines yesterday agreed to July 1 as the provisional date on which a draft amendment to the Income Tax Act (所得稅法) is to come into effect, with the aim of curbing real-estate speculation. The consensus was reached following interparty negotiations at the legislature’s Finance Committee to determine when revisions to the “integrated house and land transaction income tax” would take effect. The committee on Monday last week passed a number of revisions to the act, but failed to agree on when they would take effect. Under the proposed revisions, the tax would be set at 45 percent
TAICHUNG PLANT: An official said that generator No. 3 had been retrofitted and it generates 0.46g of particulate pollution per kilowatt-hour, down from 0.6g to 0.7g A spike in demand for electricity made it necessary to restart the third coal-fired generator at the Taichung Power Plant, Taiwan Power Co (Taipower, 台電) said yesterday as a feud with the Taichung City Government lingers. Taichung Mayor Lu Shiow-yen (盧秀燕) has sought to keep the generator from being used. In 2019, he revoked Taipower’s license to operate the generator. However, the state-run utility has taken the city government to court over the license revocation and won the case in February last year, Taipower manager Chang Ting-shu (張廷抒) said. “We would like to remind the Taichung City Government that operation of the third
RSS