2021-09-16-Credit_Suisse-亚洲反馈（硬件）_设备需求混合；除了某些半导体之外_近期峰值_87页_2mb

Technology Sector Summary

Core Content

The document provides an analysis of the technology sector, focusing on hardware and semiconductor demand, production trends, and stock implications. The insights are based on channel checks conducted in early September for Korea, Taiwan, and China, with the analysts working remotely from Japan due to the pandemic. The report highlights a mixed demand and supply situation across various segments, particularly noting the impact of the Malaysia lockdown on semiconductor supply chains.

Main Points

1. Passive Components

• The BB ratio for passive components has been declining since June, with some applications falling below 1x.
• MLCC orders are expected to peak in the near term, with Murata Manufacturing and Taiyo Yuden showing signs of this trend.
• Despite the peak, the long-term outlook remains stable, and potential buying opportunities may arise if share prices decline.

2. Smartphone Production

• CY21 Production Plans: Smartphone production plans have been revised downward, with CY21 total production expected at 1.4bn units (+7% YoY) from the initial 1.45bn units (+10% YoY).
• iPhone Production: iPhone 2021 models are expected to produce 272mn units (+19% YoY), but production was delayed in July and August, potentially leading to a 10mn unit shortfall.
• iPhone SE 3: Expected to be upgraded to a 5G model in Q1 2022.
• AP, RFIC, PMIC Supply: Supply for these components remains tight, especially for Chinese smartphones, due to lockdowns in Malaysia.
• Component Procurement: The supply of analog and discrete semiconductors is tight, with constraints increasing since July.

3. PC Production

• Notebook PC production is forecasted at 230mn units (+8% YoY) for CY21.
• PC demand is expected to grow in 2022, but device and power supply makers anticipate single-digit YoY declines in the market.

4. Game Equipment

• Nintendo Switch: Production is forecasted at 25-30mn units for CY21 and CY22, with some new models included.
• PS5: Production is expected to be just below 15mn units in CY21 and 20-25mn in CY22.
• Supply Constraints: Sony faces difficulties in PS5 procurement, particularly for FC-BGA substrates for logic ICs, while Nintendo Switch is affected by analog and discrete semiconductor shortages.

5. Semiconductor and SPE Sector

• The electronic components sector is showing signs of peaking orders, with a likely slowdown in share price gains.
• The semiconductor sector faces a high risk of inventory adjustments, potentially leading to a 40-60% decline in SPE valuations similar to past corrections.
• Renesas Electronics: Stands out as a top pick due to its relative immunity to inventory risk and strong demand for automotive chips.

6. Production Trends and Implications

• The overall IT hardware production volume forecast for CY21 has decreased from 2.115bn units (+22% YoY) in February 2021 to 1.859bn units (+7% YoY) as of the latest survey.
• Production volume for PCs, smartphones, and tablets is expected to remain positive YoY in the first and second quarters of 2021, but will likely decline in the fourth quarter.

Key Information

• Malaysia Lockdown Impact: Severe impact on semiconductor supply, especially for analog and discrete components.
• iPhone Production: Expected to reach over 100mn units in CY21, but delayed in Jul-Aug, with a potential shortfall.
• MLCC BB Ratio: Declined to around 1.0x for some suppliers, with overseas manufacturers at 0.7-0.8x.
• Stock Recommendations: Rohm is recommended due to its exposure to analog and discrete semiconductors. Renesas Electronics is highlighted as a top pick in the semiconductor sector.
• Inventory Adjustments: Likely to continue through year-end, particularly for Chinese smartphone components, and could impact SPE valuations significantly.

Summary of Stock Outlook

• Passive Components: Orders are peaking, with MLCC makers expected to see a near-term peak, but long-term growth remains positive.
• Semiconductor/SPE: High risk of inventory adjustments, with a potential decline in valuations. Renesas is recommended due to its resilience and growth potential in automotive and data center markets.
• Consumer Electronics: Sony faces challenges in its image sensor business due to the decline in Chinese smartphone production, but expects a recovery in 2H FY3/22 with increased iPhone production and non-smartphone demand.