Market Overview

Here's What Apple's iPhone 7 Means For Japanese Companies

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On September 7, Apple Inc. (NASDAQ: AAPL) launched its new iPhone 7 and 7 Plus. This has some important implications for certain Japanese technology companies, Credit Suisse’s Akinori Kanemoto said in a report.

Electronic Components

Apple’s water resistance requirements for the iPhone 7 resulted in low assembly yields in July and early August. Moreover, production of LCD panel backlights was also delayed. Despite these hiccups, output is not drastically behind schedule.

The implications are positive for Alps Electric and Mitsumi Electric, which are the likely OIS/VCM suppliers, analyst Kanemoto mentioned. He also expects Sony to benefit, since it is probably the CIS supplier.

Apple opted against an audio jack and chose a Lightning connector instead. The inclusion of a jack adaptor has positive implications for Japan Aviation Electronics, “although we would need to see a teardown of the adaptor to be certain,” Kanemoto wrote.

The iPhone 7 supports LTE Cat 9 3CA, which will support bands 11 and 21 in Japan. The analyst expects TDK to gain market share in diversity modules, while adding that Murata Manufacturing could lose diversity module market share.

Semiconductors

While SK Hynix seems to be the main supplier of 32GB MLC NAND, Toshiba Corp (USA) (OTCMKTS: TOSYY) and SanDisk Corporation (NASDAQ: SNDK) “have a virtual duopoly in 128GB TLC NAND, with SK Hynix supplying a small portion,” Kanemoto commented.

By yearend, Samsung Electronics (OTCMKTS: SSNLF) could become essentially the sole supplier of 48-layer 256GB 3D NAND, with Toshiba catering to about 5 percent of annual 256GB production.

“We maintain a bullish stance on Toshiba, as we see fresh positives for both Toshiba and the stock market in the aforementioned tight NAND market, in the commencement (albeit on a tiny scale) of 3D NAND shipments, and in price hikes on supplies to Apple,” the Credit Suisse report stated.

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Posted-In: Akinori Kanemoto Credit SuisseAnalyst Color

 

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