20210614-亚太地区科技行业-Asia_Feedback_Hardware_No_major_corrections_for_non-smartphone_applications,but_electronic_components_settling_down_79页_2mb

Summary of Technology Sector Analysis

Core Content

This document provides an analysis of the technology sector, focusing on hardware production trends and their implications for the stock market, particularly in the context of the ongoing pandemic and shifting demand dynamics. It outlines the current state of inventory adjustments, production plans, and market expectations across key segments such as smartphones, PCs, automotive, and game equipment.

Main Points and Key Information

Smartphone Production Trends

• Global Smartphone Production: CY21 production plans have been reduced from 1.6bn units (+22% YoY) to 1.45bn units (+10% YoY), reflecting a 120mn unit drop in Apr-Jun compared to the previous survey.
• Chinese Smartphone Makers: Production plans were significantly lowered, especially for low-end models. Xiaomi, OPPO, Vivo, Huawei, and Honor revised their plans to 200mn, 220mn, 160mn, 40mn, and 60mn units respectively.
• iPhone Production: CY21 production is targeted at 268mn units (+18% YoY), with the iPhone 13 series expected to reach 104mn units. The iPhone 13 product mix is anticipated to be similar to the iPhone 12 series.
• 5G Smartphone Production: 5G production plans remain unchanged at around 600mn units for CY21. However, Chinese 5G base station production has been lowered due to a slowdown in demand.
• Inventory Adjustments: Inventory adjustments are ongoing for smartphone cameras and electronic components, but not for smartphone chips. The iPhone 13 demand is expected to offset the slump in Chinese smartphones.

PC and Automotive Demand

• PC Production: CY21 production remains tight with a target of 360mn units (+23% YoY). There is no major change in production forecasts, and PC makers are anticipating 400mn units in CY22.
• Automotive: Semiconductor supply remains tight, but electronic components are expected to ease as inventory builds up. Chinese EV makers have increased electronic component inventories to two months, while Japanese and global Tier 1 companies are preparing for a potential recovery in automotive production from 2H.

Game Equipment

• Nintendo Switch: Production is expected at 30mn units in CY21 (including 5mn new-model units) and 25-30mn units in CY22.
• PS5: Production is at 15mn units in CY21 and expected to rise to 23mn units in CY22. FC-BGA substrates are a potential bottleneck for PS5 logic ICs.

Electronic Components

• Inventory Adjustments: Electronic components are showing signs of easing, particularly for MLCCs, due to ongoing capacity expansion. However, crystal devices, inductors, and FC-BGA substrates remain in tight supply.
• Stock Performance: Electronic components stocks have seen a correction, but downside risk is limited. Murata Mfg (6981) is highlighted as a near-term bull case, while MLCC makers like Murata and Taiyo Yuden are expected to benefit from EV market growth in the long term.
• Semiconductor Sector: Semiconductor procurement has eased from abnormal levels in Feb-Apr, but lead times for discrete and analog semiconductors remain long. Renesas Electronics (6723) is highlighted as a top pick due to stable earnings and growing demand for automotive applications.

Key Charts and Data

• Figure 1 & 2: Show global smartphone production volume on a quarterly and annual basis.
• Figure 3: Provides iPhone production forecasts for CY21.
• Figure 4: Details production plans for major smartphone makers.
• Figure 5 & 6: Highlights IT hardware production plans and trends.
• Figure 8: Includes production data for PCs, smartphones, and tablets as of early June 2021.

Stock Recommendations and Outlook

• Near-term Outlook: The electronic components sector is expected to range trade with limited downside risk. iPhone-related stocks, especially Murata Mfg, are seen as bullish.
• Long-term Outlook: MLCC makers (Murata, Taiyo Yuden), as well as Rohm and Nidec, are expected to benefit from EV market growth. Renesas Electronics is recommended due to stable earnings and automotive demand.
• Cautious Stance: The SPE sector remains cautious due to ongoing semiconductor inventory adjustment risks. The WFE market outlook has largely cycled through, with limited upside.

Conclusion

The technology sector is experiencing a shift in production plans and inventory management, with smartphone production scaling back but iPhone 13 demand providing a buffer. PC and automotive demand remains strong, while electronic components are beginning to stabilize. The report highlights specific stocks and sectors that are likely to benefit from these trends, with a focus on both short-term and long-term investment opportunities.