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MacqTech Thematic
Semiconductors: Smartphones getting a memory boost
Event
At the Mobile World Congress (MWC) from 14-17 February, new mobile
devices confirmed the trend towards greater capabilities and higher memory
content – both mobile DRAM and NAND flash.
As highlighted during our meetings with investors in Hong Kong and
Singapore during the week of 21-25 February, we view this as particularly
positive for NAND flash producers and semiconductor wafer suppliers.
The potential unveiling of Apple's iPad 2 on 2 March should further highlight
the prospects for NAND flash memory.
Impact
We believe advances in mobile devices – in features and user interfaces – are
far outpacing those in PCs. A result is that consumers are diverting their
spending to drive strong growth in demand for smartphones and tablets.
These improvements in features are rapidly driving up the memory content
(NAND flash and DRAM) of smartphones and tablets. For instance, the new
Samsung Galaxy S II smartphone contains 1GB of DRAM plus 16 or 32 GB of
NAND flash (with the option of adding up to 32GB or more via the SD card
slot. This is double that of last year's Samsung Galaxy S.
We forecast an 11.5-fold increase in NAND flash bit demand between
CY2010 and CY2015, to 134bn GB from 11.6bn GB.
We believe the quantity of NAND flash bits used in mobile phones may alone
increase more than 43-fold between CY2010 and CY2015, to account for
~29% of the NAND flash market vs less than 8% in 2010.
On top of this, we expect strong demand growth in tablets will further drive
demand for NAND flash. We estimate a 57-fold increase in NAND flash
demand here. We believe that by CY2015, the tablet market could account for
22% of the total NAND flash demand, from just 4.5% in 2010.
Outlook
We have a positive stance on the chip industry outlook in CY2011, and are
particularly encouraged by the strong outlook for NAND flash, the 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 (to US$27bn), 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 CY2011. They expect
market leaders Samsung, Hynix and Elpida to benefit. Macquarie’s Michael
Liu also notes that strong growth in Elpida’s mobile DRAM volumes and
Toshiba’s NAND flash shipments should be positive for Powertech.
We believe a NAND flash output boom will be positive for the semiconductor
wafer industry in general and SUMCO in particular. We estimate that NAND
flash sector 300mm wafer demand may rise from ~1.15m units/month in 4Q
CY2010 to over 2.5m/month by CY2015 – an increase of ~1.5m/month, or
about four times the current capacity of Toshiba. We believe this will help
drive total demand from 3.6m units/month in 4Q CY10 to >6m/month by 2015.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
MacqTech Thematic
Semiconductors: Smartphones getting a memory boost
Event
At the Mobile World Congress (MWC) from 14-17 February, new mobile
devices confirmed the trend towards greater capabilities and higher memory
content – both mobile DRAM and NAND flash.
As highlighted during our meetings with investors in Hong Kong and
Singapore during the week of 21-25 February, we view this as particularly
positive for NAND flash producers and semiconductor wafer suppliers.
The potential unveiling of Apple's iPad 2 on 2 March should further highlight
the prospects for NAND flash memory.
Impact
We believe advances in mobile devices – in features and user interfaces – are
far outpacing those in PCs. A result is that consumers are diverting their
spending to drive strong growth in demand for smartphones and tablets.
These improvements in features are rapidly driving up the memory content
(NAND flash and DRAM) of smartphones and tablets. For instance, the new
Samsung Galaxy S II smartphone contains 1GB of DRAM plus 16 or 32 GB of
NAND flash (with the option of adding up to 32GB or more via the SD card
slot. This is double that of last year's Samsung Galaxy S.
We forecast an 11.5-fold increase in NAND flash bit demand between
CY2010 and CY2015, to 134bn GB from 11.6bn GB.
We believe the quantity of NAND flash bits used in mobile phones may alone
increase more than 43-fold between CY2010 and CY2015, to account for
~29% of the NAND flash market vs less than 8% in 2010.
On top of this, we expect strong demand growth in tablets will further drive
demand for NAND flash. We estimate a 57-fold increase in NAND flash
demand here. We believe that by CY2015, the tablet market could account for
22% of the total NAND flash demand, from just 4.5% in 2010.
Outlook
We have a positive stance on the chip industry outlook in CY2011, and are
particularly encouraged by the strong outlook for NAND flash, the 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 (to US$27bn), 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 CY2011. They expect
market leaders Samsung, Hynix and Elpida to benefit. Macquarie’s Michael
Liu also notes that strong growth in Elpida’s mobile DRAM volumes and
Toshiba’s NAND flash shipments should be positive for Powertech.
We believe a NAND flash output boom will be positive for the semiconductor
wafer industry in general and SUMCO in particular. We estimate that NAND
flash sector 300mm wafer demand may rise from ~1.15m units/month in 4Q
CY2010 to over 2.5m/month by CY2015 – an increase of ~1.5m/month, or
about four times the current capacity of Toshiba. We believe this will help
drive total demand from 3.6m units/month in 4Q CY10 to >6m/month by 2015.
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