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India Equity Research Reports, IPO and Stock News
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Taiwan Hardware Sector--------------------------------------------------------------------------------------
'IT hardware: serving the smart era' – implications for the Taiwan supply chain
● The CS global tech team has published a report on the IT
hardware sector, Serving the smart era, on 16 March. The team is
positive on the tablet market and forecasts 65 mn units for 2011,
from 17 mn units in 2010. It believes tablets will account for 42%
of the total PC market in 2015. In addition, the PC market, without
tablets, will only grow 4.9% and 6.4% in 2011 and 2012,
respectively.
● This is consistent with our positive view on tablets – especially iPad –
and conservative view on the regular PC market. The food chain of
Apple and tablets in Taiwan should continue to be a major beneficiary.
● For system players, we are positive on Pegatron, Wistron and
Asustek. Although we see some short-term noise on component
supply after the Japan earthquake on 11 March, the majority of tablet
and iPad shipments will likely come out in 2H11, launching in 1H11.
● For component players, key beneficiaries for strong tablet growth
include HDI (Unimicron, Tripod), substrates (Kinsus), metal casing
(Catcher) and optical lens (Largan). The potential risk is whether
the production of upstream material, i.e., BT resin can be back to
normal within one-two months.
● The strong growth of the tablet PC suggests great opportunity for
touch panel suppliers such as TPK, CMI and Wintek. All should
see very strong momentum in 2011 on the strength of the iPad.
We see further upside from non-Apple tablets in 2H11
Ten themes for the IT Industry
1) Cyclical tailwinds for now,
structurally 4% growth
Our analysis of macroeconomic and corporate environment, combined with our proprietary IT survey suggests that the total IT industry (PCs,
servers, storage, printing, and services) will continue to see a cyclical recovery in 2011/2012, with industry revenue growing to US$1.3 tn,
implying around 4-5% growth.
2) Compute demand drives tablet
market to $120bn long term
Our addressable market analysis for tablets (based on PC forecasts by price point) suggests that the tablet market could reach 298 mn units by
2015 (42% of total PC units), with revenue of US$120 bn.
3) Smartphones set to cross 1bn
unit mark by 2015
Based on our proprietary affordability analysis, we estimate that the smartphone market will grow from 297 mn units in 2010 to 594 mn/1.04 bn
units in 2012/2015, implying a CAGR of 28.5% over the next five years.
4) Storage has several secular
growth drivers
Driven by accelerating unstructured data growth, server virtualization, and regulatory/compliance requirements, we believe storage will become
increasingly important. Hence, we expect storage (hardware, software, and services) revenue to grow at a healthy 7% p.a. to US$65 bn by 2015.
5) Services set for a gradual
recovery
Based on our view that services are being underconsumed globally, we are looking for around 5% top-line growth for the services market
(US$780 bn+ in revenue in 2010) over the next five years.
6) Lackluster outlook: servers,
traditional PCs, printing
We see muted outlook for servers and traditional PC markets, as we expect revenue declines at CAGRs of 2% and 6%, respectively. For the
printer market, we expect revenue to grow only 1% in 2010-2015 owing to a shrinking installed printer base.
7) Radical changes to the PC
value chain?
We believe that strong tablet unit and revenue growth will come at the expense of traditional PC vendors. With Apple and Android having
innovative platforms, industry profit share of vendors such as Microsoft and Intel will come under pressure in the PC market.
8) Competition for the datacenter
heating up
With an accelerating trend to become an end-to-end solution provider, we are seeing signs of traditional partners now competing head to head,
with Cisco's push into the server market, Oracle's move into the storage market and HP's efforts in the networking space.
9) M&A : sector is ripe for
continued consolidation
Our analysis for gross cash, net cash, and R&D investments at top 50 technology companies over time suggests that M&A activities are likely to
continue in the sector, with IBM, HP, and Dell likely to be most active.
10) The cloud may not be as
incremental as you think
Recently announced cloud offerings from IBM, HP, and Dell are fundamentally similar to infrastructure outsourcing services already being
provided by these companies. As such, we expect the impact of cloud may not be as incremental as perceived by the market.
Source: Company data, Credit Suisse estimates. Note: Intel is covered by Credit Suisse Semiconductor analyst John Pitzer, Microsoft and Oracle are covered by Credit Suisse
Software analyst Phil Winslow, Cisco is covered by Credit Suisse Communication Infrastructure analyst Paul Silverstein.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Taiwan Hardware Sector--------------------------------------------------------------------------------------
'IT hardware: serving the smart era' – implications for the Taiwan supply chain
● The CS global tech team has published a report on the IT
hardware sector, Serving the smart era, on 16 March. The team is
positive on the tablet market and forecasts 65 mn units for 2011,
from 17 mn units in 2010. It believes tablets will account for 42%
of the total PC market in 2015. In addition, the PC market, without
tablets, will only grow 4.9% and 6.4% in 2011 and 2012,
respectively.
● This is consistent with our positive view on tablets – especially iPad –
and conservative view on the regular PC market. The food chain of
Apple and tablets in Taiwan should continue to be a major beneficiary.
● For system players, we are positive on Pegatron, Wistron and
Asustek. Although we see some short-term noise on component
supply after the Japan earthquake on 11 March, the majority of tablet
and iPad shipments will likely come out in 2H11, launching in 1H11.
● For component players, key beneficiaries for strong tablet growth
include HDI (Unimicron, Tripod), substrates (Kinsus), metal casing
(Catcher) and optical lens (Largan). The potential risk is whether
the production of upstream material, i.e., BT resin can be back to
normal within one-two months.
● The strong growth of the tablet PC suggests great opportunity for
touch panel suppliers such as TPK, CMI and Wintek. All should
see very strong momentum in 2011 on the strength of the iPad.
We see further upside from non-Apple tablets in 2H11
Ten themes for the IT Industry
1) Cyclical tailwinds for now,
structurally 4% growth
Our analysis of macroeconomic and corporate environment, combined with our proprietary IT survey suggests that the total IT industry (PCs,
servers, storage, printing, and services) will continue to see a cyclical recovery in 2011/2012, with industry revenue growing to US$1.3 tn,
implying around 4-5% growth.
2) Compute demand drives tablet
market to $120bn long term
Our addressable market analysis for tablets (based on PC forecasts by price point) suggests that the tablet market could reach 298 mn units by
2015 (42% of total PC units), with revenue of US$120 bn.
3) Smartphones set to cross 1bn
unit mark by 2015
Based on our proprietary affordability analysis, we estimate that the smartphone market will grow from 297 mn units in 2010 to 594 mn/1.04 bn
units in 2012/2015, implying a CAGR of 28.5% over the next five years.
4) Storage has several secular
growth drivers
Driven by accelerating unstructured data growth, server virtualization, and regulatory/compliance requirements, we believe storage will become
increasingly important. Hence, we expect storage (hardware, software, and services) revenue to grow at a healthy 7% p.a. to US$65 bn by 2015.
5) Services set for a gradual
recovery
Based on our view that services are being underconsumed globally, we are looking for around 5% top-line growth for the services market
(US$780 bn+ in revenue in 2010) over the next five years.
6) Lackluster outlook: servers,
traditional PCs, printing
We see muted outlook for servers and traditional PC markets, as we expect revenue declines at CAGRs of 2% and 6%, respectively. For the
printer market, we expect revenue to grow only 1% in 2010-2015 owing to a shrinking installed printer base.
7) Radical changes to the PC
value chain?
We believe that strong tablet unit and revenue growth will come at the expense of traditional PC vendors. With Apple and Android having
innovative platforms, industry profit share of vendors such as Microsoft and Intel will come under pressure in the PC market.
8) Competition for the datacenter
heating up
With an accelerating trend to become an end-to-end solution provider, we are seeing signs of traditional partners now competing head to head,
with Cisco's push into the server market, Oracle's move into the storage market and HP's efforts in the networking space.
9) M&A : sector is ripe for
continued consolidation
Our analysis for gross cash, net cash, and R&D investments at top 50 technology companies over time suggests that M&A activities are likely to
continue in the sector, with IBM, HP, and Dell likely to be most active.
10) The cloud may not be as
incremental as you think
Recently announced cloud offerings from IBM, HP, and Dell are fundamentally similar to infrastructure outsourcing services already being
provided by these companies. As such, we expect the impact of cloud may not be as incremental as perceived by the market.
Source: Company data, Credit Suisse estimates. Note: Intel is covered by Credit Suisse Semiconductor analyst John Pitzer, Microsoft and Oracle are covered by Credit Suisse
Software analyst Phil Winslow, Cisco is covered by Credit Suisse Communication Infrastructure analyst Paul Silverstein.
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