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Semiconductors: The Year of the Tablet rolls on … with more tablets
Event
As we wrote in our MacqTech Thematic report of 12 January, we believe 2011
is the Year of the Tablet, with positive implications for the semiconductor
industry as a whole, and a number of firms in particular. We expect strong
growth in the tablet market this year to 56m units in CY11 from >17m last year.
On 9 February, HP unveiled its anticipated webOS-based TouchPad tablet
and a set of new smartphones. We do not know if HP will be successful in the
face of Apple’s iPad (especially with a new version due soon) and upcoming
Android 3.0 “Honeycomb”-based products like Motorola’s XOOM, but one
thing is clear – the wave of tablet launches is still rolling.
Impact
The TouchPad contains a dual-ARM core Qualcomm Snapdragon processor
running at 1.2GHz and a 9.7” XGA capacitive multi-touch screen. Two
features HP is highlighting is the Touchstone near-field data transfer
technology, and the ability to wirelessly print to HP printers. But a main
differentiator is that the TouchPad uses the webOS operating system first
deployed by Palm in 2009 and originally designed by Matias Duarte, who is
now leading the GUI design for Android 3.0 as Director, Android User
Experience at Google. Palm and webOS had been acquired by HP in 2010.
Like the majority of tablets, the TouchPad will come with NAND flash storage
(16GBytes or 32GBytes internally, with no SD card slot). In this report we
illustrate how device and eco-system innovation is boosting the demand for
NAND flash above and beyond the effect of cost/price reduction.
Outlook
We have a positive stance on the chip industry outlook in CY11, and are
particularly encouraged by the strong outlook for NAND flash, the standard
data storage technology for tablets and smartphones. We expect Samsung
and Toshiba to be beneficiaries of the ~25% sales growth we forecast in
NAND flash, vs 6% growth for the broader semiconductor industry.
Macquarie’s Daniel Kim and Damian Thong are also positive on the outlook
for mobile DRAM, where they see >150% bit growth in CY11. They expect
market leaders Samsung, Hynix and Elpida to benefit. Damian Thong
upgraded Elpida to Outperform on 3 February, noting Elpida’s strong designin
momentum at 8 of 10 top smartphone vendors. This may drive the mobile
DRAM share of Elpida’s sales from ~40% in 1Q CY11 to ~60% in 1Q CY12.
Macquarie’s Michael Liu believes the smartphone and tablet boom will be at
least near-term positive for foundries and OSAT firms due to the resulting
demand for advanced chipmaking capacity used to produce ARM-based
application processors like NVIDIA's Tegra 2. He continues to prefer OSAT
firms like ASE, SPIL and Powertech due to the superior industry structure.
Macquarie’s Jimmy Hsu views the smartphone and tablet boom to be positive
for fabless LCD driver IC vendor Novatek. Conversely he believes that the
lacklustre PC market outlook has negative implications for firms less wellpositioned
in smartphones and tablets. Examples include MediaTek
and Realtek Semiconductor, and he maintains Underperform ratings on these.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Semiconductors: The Year of the Tablet rolls on … with more tablets
Event
As we wrote in our MacqTech Thematic report of 12 January, we believe 2011
is the Year of the Tablet, with positive implications for the semiconductor
industry as a whole, and a number of firms in particular. We expect strong
growth in the tablet market this year to 56m units in CY11 from >17m last year.
On 9 February, HP unveiled its anticipated webOS-based TouchPad tablet
and a set of new smartphones. We do not know if HP will be successful in the
face of Apple’s iPad (especially with a new version due soon) and upcoming
Android 3.0 “Honeycomb”-based products like Motorola’s XOOM, but one
thing is clear – the wave of tablet launches is still rolling.
Impact
The TouchPad contains a dual-ARM core Qualcomm Snapdragon processor
running at 1.2GHz and a 9.7” XGA capacitive multi-touch screen. Two
features HP is highlighting is the Touchstone near-field data transfer
technology, and the ability to wirelessly print to HP printers. But a main
differentiator is that the TouchPad uses the webOS operating system first
deployed by Palm in 2009 and originally designed by Matias Duarte, who is
now leading the GUI design for Android 3.0 as Director, Android User
Experience at Google. Palm and webOS had been acquired by HP in 2010.
Like the majority of tablets, the TouchPad will come with NAND flash storage
(16GBytes or 32GBytes internally, with no SD card slot). In this report we
illustrate how device and eco-system innovation is boosting the demand for
NAND flash above and beyond the effect of cost/price reduction.
Outlook
We have a positive stance on the chip industry outlook in CY11, and are
particularly encouraged by the strong outlook for NAND flash, the standard
data storage technology for tablets and smartphones. We expect Samsung
and Toshiba to be beneficiaries of the ~25% sales growth we forecast in
NAND flash, vs 6% growth for the broader semiconductor industry.
Macquarie’s Daniel Kim and Damian Thong are also positive on the outlook
for mobile DRAM, where they see >150% bit growth in CY11. They expect
market leaders Samsung, Hynix and Elpida to benefit. Damian Thong
upgraded Elpida to Outperform on 3 February, noting Elpida’s strong designin
momentum at 8 of 10 top smartphone vendors. This may drive the mobile
DRAM share of Elpida’s sales from ~40% in 1Q CY11 to ~60% in 1Q CY12.
Macquarie’s Michael Liu believes the smartphone and tablet boom will be at
least near-term positive for foundries and OSAT firms due to the resulting
demand for advanced chipmaking capacity used to produce ARM-based
application processors like NVIDIA's Tegra 2. He continues to prefer OSAT
firms like ASE, SPIL and Powertech due to the superior industry structure.
Macquarie’s Jimmy Hsu views the smartphone and tablet boom to be positive
for fabless LCD driver IC vendor Novatek. Conversely he believes that the
lacklustre PC market outlook has negative implications for firms less wellpositioned
in smartphones and tablets. Examples include MediaTek
and Realtek Semiconductor, and he maintains Underperform ratings on these.
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