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In 2020, despite Covid-19, global 5G smartphone sales are to reach 250mn (1,329% y-y). With robust growth momentum sustaining in 2021, global sales of 5G phones are estimated to rise to 432mn (+72.7% y-y) in line with full-fledged 5G network services in major economies such as the US, Japan, and Europe. In particular, growth should be much faster for mmWave 5G phones. Amidst the rapid expansion of 5G smartphone market, investors should pay attention to players of handset parts/materials whose content per handset or unit price is higher for 5G phone supply (MLCC, RF-frontend, antenna, modem chip), and companies whose parts are newly installed to 5G handset (antenna cable).
We note that Chinese handset players have been leading the global 5G smartphone market, as various local companies have competitively launched 5G phones in order to take an initiative in the Chinese market. But, from 2H20, Apple and SEC’s 5G smartphone shipment volume should rise rapidly. In particular, at Apple, 5G phone penetration rate is expected to jump from 34.5% in 2020 to 60% in 2021. As for SEC, only 11.2% of its smartphones are expected to be 5G-enabled in 2020, but the portion is projected to expand to 23.5% in 2021.
In line with fast penetration of 5G smartphones, demand for related components should surge. Sub-6 Ghz 5G smartphones and mmWave 5G smartphones require around 10% and 20% more MLCC per unit, respectively, than 4G smartphones. Also, compared to two to three RF front-end modules required for 4G smartphones, sub-6 Ghz 5G smartphones and mmWave 5G-capable smartphones require four to five modules and five to six modules per unit, respectively. Accordingly, the shift to 5G smartphones should strongly boost demand for MLCC and RF front-end modules. In addition, content per unit and ASP are likely to rise for 5G antennas and modem chips, as well as cables that connect them.
Expected beneficiaries are to include SEMCO and Samwha Capacitor (MLCC); Wipam and Wisol (RF front-end); and DKT and BH Flex (antenna and cable).