MS-2327 20200219.pdf

Smartphone camerasSector outlook
Covid-19 impactSmartphone demand delays, but multi-cam uptrend intactMWC 2020 has been cancelled for the first time in its history, and we revise downour smartphone forecast, but the multi-cam uptrend continues as we had expectedin Samsung/Xiaomi’s flagships and Huawei, Oppo and Vivo’s new releases incoming weeks, including smaller front cameras, 3-4 rear cameras(Main+Tele+UW+ToF), larger CIS, more 7P-lenses, and higher optical zoommultiples. Near term, we expect Covid-19-related supply chain disruption to posedownside risk to Largan and Sunny Optical. We cut Largan’s TP from NT$5,850 toNT$5,730 but maintain our Sunny Optical TP of HK$159. Both remain BUYs.

Global SmartphoneAssessing COVID-19 Impact; Revise Down Unit Forecast
2019 Smartphone market recap – IDC posted 2019 smartphone statistics.Smartphone unit shipment reached 1,372mn (-2% YoY) in 2019. ASP declined by 3%to US$334 and overall smartphone market size reached US$457.9bn (-5% YoY).Samsung remains the #1 market share at 21.6%, followed by Huawei (17.5%), Apple(13.9%) and Xiaomi (9.2%). 4Q19 smartphone shipment declined 1% YoY to 370mn,mainly dragged by weak China demand (-16% YoY) with muted 4G smartphonedemand prior to 5G launch. Global 5G smartphone reached 11.5mn in 4Q19,accounting for 3% total units. 5G penetration has reached 10% in China in 4Q19, withHuawei having dominant market share.