Mon, Sep 07, 2015 - Page 13 News List

New iPhone to benefit Catcher: analyst

LOCAL INDUSTRY:The much-anticipated launch of new Apple products this month is expected to provide a boost to local parts manufacturers across the technology industry

By Ted Chen  /  Staff reporter

Catcher Technologies Co (可成科技), which produces casings for electronic products, is expected to be the biggest beneficiary among local Apple Inc suppliers with the US company’s launch of new smartphones, Credit Suisse Group AG said last week.

“We expect continued market share consolidation for Catcher, as the number of iPhone 6 casing suppliers has been reduced from four to three last year,” Credit Suisse analyst Pauline Chen (陳柏齡) said in a note to investors on Thursday last week.

There is still room for Catcher to gain a bigger market share, up from 15 percent estimated for this year, allowing the company to become the No. 2 casing supplier for Apple after Foxconn Technology Co (鴻準), Chen said.

In light of an anticipated casing material upgrade, from 6000-series to 7000-series aluminum, Chen said that the increase in machining hours would also increase financial and technological entry barriers, leading to faster profit share consolidation in the casing sector and higher average selling prices for Catcher.

On market expectations of weakening demand in China, Chen said that Catcher would be less affected, as 38 percent of China’s iPhone users are using 5.5-inch iPhones, compared with the global average of 31 percent.

Credit Suisse figures show that Catcher controlled 23 percent of global casing revenues in the first half, behind Foxconn’s 35 percent, with Casetek Holdings Ltd (鎧勝) in third place with a 14 percent share.

Catcher yesterday reported that its sales last month grew 15.23 percent sequentially to NT$7.19 billion (US$219 million), up 43.66 percent from a year earlier.

However, Credit Suisse analyst Randy Abrams said Apple is a mixed catalyst this year for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as it adopts dual chip sourcing for its new smartphones and tablets.

Last year, TSMC was the only chip supplier for iPhones, but it is likely to supply only 55 percent of iPhone chips this year as Samsung becomes an Apple processor supplier, Abrams said. TSMC’s market share in Apple processors is anticipated to climb back to about 80 percent to 85 percent in the second half of next year, when the company’s InFo packaging process technology is to be used for Apple’s A10 chip.

Credit Suisse is also positive about new opportunities offered by the anticipated features of the new iPhone. Sales and margins are expected to inch up for lens maker Largan Precision Co (大立光) as Apple bumps up the iPhone’s main camera to 12 megapixels from 8 megapixels — the first significant change in sensor size since the debut of he iPhone 4S in 2010. In addition, TPK Holding Co (TPK, 宸鴻) is expected to enjoy higher order volumes as the troubled display component maker re-enters the iPhone supply chain by providing lamination of force touch sensors with the backlit metal chassis.

Credit Suisse foresees demand for iPhones reaching 234.1 million units this year and 241.4 million units next year.

However, Credit Suisse said that iPhone shipments in the near term might be constrained by low yield rates for flexible printed circuit and haptics components. Analysts detected a mismatch between assembly and supply volume in July and that increased last month.

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