Starting this month, companies in Apple Inc’s iPhone supply chain are expected to see monthly sales grow, as mass production of new iPhone models is on the horizon, Yuanta Securities Investment Consulting Co (元大投顧) said.
“We expect the most significant features upgraded for new iPhones in the second half of 2020 to be 5G and camera function,” Yuanta analyst Nicole Tu (塗景婷) said in a report on Wednesday.
“Thus, we believe suppliers of these components will benefit most either in terms of an increase in quality or quantity of components needed versus suppliers of other components, who will likely suffer from fiercer price pressure due to the sluggish macroeconomic outlook and greater competition,” she said.
Handset camera lens manufacturers Largan Precision Co (大立光) and Genius Electronic Optical Co (玉晶光), Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Win Semiconductors Corp (穩懋), silicon substrate maker Kinsus Interconnect Technology Corp (景碩), printed circuit board (PCB) maker Zhen Ding Technology Holding Ltd (臻鼎), copper-clad laminate maker Elite Material Co (台光電) and metal casing supplier Casetek Holdings Ltd (鎧勝) are expected to benefit the most, the Yuanta report said.
“Our [supply chain] checks suggest that PCB suppliers will likely start new iPhone mass production in June, followed by panel and lens makers from July,” Tu said.
However, Yuanta is less optimistic about sales growth for iPhone assembly makers such as Hon Hai Precision Industry Co (鴻海精密), Pegatron Corp (和碩) and Wistron Corp (緯創).
“We suspect the [iPhone] mass production schedule may be pushed out to September-October period versus the previous schedule of August-September period, indicating a one-month delay vs the normal delivery date,” Tu said, referring to iPhone assembly.
The COVID-19 pandemic-spurred work-from-home trend mostly benefited non-Apple tablet and notebook computers in the second quarter, Yuanta said.
Apple’s iPad and Macbook suppliers are expected to see monthly sales growth in the third quarter — after the planned launches of new iPad and Macbook models — while some upstream component suppliers might start mass production at the end of the third quarter, it said.
Some of the firms likely to benefit from mass production of the new models include touchpanel maker General Interface Solution Holding Ltd (業成), light metal casing and enclosure supplier Catcher Technology Co (可成), LCD backlight module maker Radiant Opto-Electronics Corp (瑞儀), mixed-signal ICs and display chips supplier Parade Technologies Ltd (譜瑞), Taiwan Surface Mounting Technology Corp (台灣表面黏), flexible PCB maker Flexium Interconnect Inc (台郡) and backlighting solutions supplier Global Lighting Technologies Inc (茂林), it said.
In related news, NH Investment & Securities Co sees the pandemic continuing to boost PC demand, which in turn would generate robust demand for networking chips, notebook chip solutions, healthcare sensors and microcontrollers through October.
Along with greater demand for non-face-to-face services due to COVID-19, the introduction of Wi-Fi certified 6 products is contributing to strong chip sales growth, analyst Doh Hyun-woo said in NH Investment’s note on Wednesday.
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