Reuters reported that Hon Hai and Sharp have teamed up to bid for Toshiba`s prized memory chip business. Hariharan said a potential move into the semiconductor business was underpinned by the fact that Hon Hai made close to 20 to 25 percent in revenue from enterprise and cloud; the company assembles servers, storage elements and switches for tech companies and enterprise is a big driver for NAND flash, he added. The other two major contract electronics manufacturers that assemble iPhones — Pegatron and Wistron — also remain exposed to Apple, at least in the short term. Wistron is a latecomer to the assembly equation and handles mostly the older iPhones.
Hariharan said JPMorgan has a conservative view on Wistron because the company is still making the transition from producing lower-end handsets to the most advanced; it needs to build up capacity to handle the high volume seen in the first quarter of new iPhone launches, where Apple can sell more than 10 million units on the opening weekend. "If you`re not a vendor who is able to support that volume ramp in that period, then you never get peak volume for your capacity," he said. Meanwhile, some of Apple`s more specialized suppliers — who provide components such as camera modules — remain well-hedged in their business because they serve the global smartphone market — meaning, they were also selling into other smartphone brands.
For example Samsung or SK Hynix supply memory to majority of the smartphone brands. "They don`t have the same level of cyclicality," said Hariharan, but they don`t enjoy the same benefits from a surge in demand for iPhones. "They won`t have the same upside when you have a very strong iPhone cycle, in terms of their revenues and profits.
0 comments:
Post a Comment