AIC：提升台积电与联发科的目标价

1、1 April 2019 Asia Pacific/Taiwan Equity Research Semiconductor DevicesAsia Semiconductor SectorResearch AnalystsRandy Abrams, CFA886 2 2715 6366 HYPERLINK mailto:randy.abrams randy.abramsJerry Su886 2 2715 6361 HYPERLINK mailto:jerry.su jerry.suPauline Chen886 2 2715 6323 HYPERLINK mailto:pauline.ch

2、en pauline.chenThompson Wu886 2 2715 6386 HYPERLINK mailto:thompson.wu thompson.wuAchal Sultania44 20 7883 6884 HYPERLINK mailto:achal.sultania achal.sultaniaKeon Han82 2 3707 3740 HYPERLINK mailto:keon.han keon.hanSang Uk Kim82 2 3707 3795 HYPERLINK mailto:sang.kim sang.kimKyna Wong852 2101 6950 HY

3、PERLINK mailto:kyna.wong kyna.wongHaas Liu886 2 2715 6365 HYPERLINK mailto:haas.liu haas.liuTHEMEAIC 2019: Raising TSMC/Mediatek targets, chain slowly lifting off a deep bottomFigure 1: Hardware/Semiconductor companies attending AIC by sub-sector SemiconductorTSMCSMICHua HongASMLASE MediatekSiltroni

4、csASM PacificInari AmertronDownstream hardwareSamsungLG Electronics LenovoXiaomiRazer HuamiDownstream components TPKQ-TechCatcherFITLG InnotekDisplayLG DisplayTelcosChina Mobile China Telecom China UnicomAutomationAirtacSource: Credit Suisse researchTech supply chain in attendance at AIC. The 22nd C

5、redit Suisse AIC in Hong Kong featured 300 companies, 2,000 investors and 90 keynotepresentations. We published our takeaways from the relevant tech companies including the chip companies within our coverage including foundries TSMC, SMIC, and Hua Hong; back-end including ASE, Inari, and ASM Pacific

6、 and IC Design (Mediatek) and notable tech companies hardware (Samsung Electronics, Xiaomi and Lenovo), components (Q- Tech, Soulbrain, TPK), telecoms (China Mobile, China Unicom and China Telecom), wafers (Siltronic), equipment (ASML) and automation (Airtac).Still a mixed outlook for the tech chain

7、. Supply chain feedback was still mixed at the AIC and HYPERLINK /s/_XRCG4AA-WErJkk Semicon China, with the tech supply chainmaintaining a view for a deep seasonal bottom in 1Q19, some pick-up from a low base in 2Q19 and hopes for a more normal seasonal 2H19 ramp. Most companies acknowledge 2-3 quar

8、ters to clear excess component inventory (memory, logic semis, MLCCs) and product cycles stay in a lull during the late stage of 4G with unexciting spec upgrades beyond multi- cam, other end markets flat (PC/TVs) and auto gains dampened by cyclical slowdown in units. Hyperscale is at least still tra

9、cking mild growth, IoT demand remains strong and early 5G infrastructure deployments continue.TSMC outlook solid beyond the 1H slowdown. We maintain Outperform on TSMC following AIC and lift our target price from NT$250 to NT$280,which would be 5% FCF yield, 3.5-4.0% dividend yield at our target pri

10、ce and 17x cash adjusted 2020 EPS of NT$15. We expect slowness to continue in 1H19, with 1Q19 at high-end of guidance down 25-26% but 2Q19 up only 5% QoQ before 2H19 rebounds strongly on sharp 7nm ramps supported by high-end share gains into AMD and Qualcomm, customer share gains by Huaweis chip div

11、ision and seasonal ramp of iPhone with larger die size.Mediatek gradual margin improvement and non-mobile diversification continues. We maintain Outperform on Mediatek following AIC and lift our2019-20 earnings from NT$12.88/NT$14.63 to NT$13.81/NT$16.22 on slightly higher sales and continued improv

12、ement in GMs, raising our TP from NT$290 to NT$350 based on 15x cash adjusted 2020 P/E (21x straight P/E). Our revision comes from higher revenue with 1Q19 tracking to higher-end of guidance on better smartphone/non-mobile growth products and gradually improving GMs from improving mix and costs.DISC

13、LOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: CreditSuisse does and seeks to do business with companies covered in its research reports. As a result, investors should be awa

14、re that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this reportFocus chartsFigure 2: TSMC 1Q19-2Q19 and 2019-20 estimates CS vs street1Q192Q1920192020(NT$ mn)CSCS(old)StreetRevised guidanceCSCS(old)StreetGuidanceCSCS(old)Street

15、CSCS(old)StreetSalesChg (%)GM (%)OpM (%)Net Inc.216,839-25.242.330.262,107215,779-25.542.130.061,408223,170-23.043.732.365,992US$7.0-7.1bn/NT$214.2-217.3bn-25.0% to -26.1% QoQ (NT$)41-43%29-31%NT$30.6:1 Guide228,1895.245.032.364,257245,79413.945.934.272,623234,4155.045.434.068,046+US$400mn salesGM +

16、1.5%OpM +2.1%1,011,853-1.946.735.4329,3651,041,0810.946.435.3337,1431,046,4451.547.035.9338,5961,120,91510.849.337.9389,0441,144,86410.048.237.0388,8701,142,2999.248.737.4387,368EPS (NT$)2.402.372.552.482.802.61+34c EPS12.7013.0013.2115.0015.0015.11US GAAP EPS3.383.382.552.562.562.6112.7013.0013.211

17、5.0015.0015.11Source: Company data, Credit Suisse estimates, The BLOOMBERG PROFESSIONAL serviceFigure 3: Mediatek 1Q19-2Q19 and 2019-20 estimates CS vs street(NT$ mn)1Q19CS2Q19CS(old)Street2018ActualCS2019CS(old)StreetCS2020CS(old)StreetCSCS(old)StreetGuidanceSales$52,666$51,659$51,939NT$48.7-53.6bn

18、$60,343$59,486$60,377$238,057$247,651$243,876$244,095$264,877$261,481$263,065Chg-13.5%-15.2%-14.7%Down 12-20%14.6%15.2%16.2%-0.1%4.0%2.4%2.2%7.0%7.2%10.2%GM%40.2%39.5%39.6%GM: 38-41%40.3%39.8%39.7%38.5%40.4%40.0%39.8%40.6%40.1%40.4%OpM%5.7%4.5%4.9%OpM: 1-8%8.3%7.4%8.0%6.8%9.1%8.5%8.4%10.2%9.2%9.9%Ne

19、t Inc.3,2072,5993,457FX: 30.94,8224,3015,48017,17121,68320,22222,05625,46722,97126,519GAAP EPS$3.14$2.75$2.15$3.07$2.74$3.44$13.29$14.78$13.85$14.00$16.22$14.63$16.94Pro Forma EPS$2.04$1.66$2.15$3.07$2.74$3.44$10.96$13.81$12.88$14.10$16.22$14.63$17.09Source: Company data, Credit Suisse estimates, Th

20、e BLOOMBERG PROFESSIONAL serviceAsian Upstream sales1Q182Q183Q184Q181Q19E 2Q19E 3Q19E 4Q19EFoundry$10,660 $9,991 $10,823 $11,665$9,318 $9,681 $11,315 $12,190QoQ-9.0%-6.3%8.3%7.8%-20.1%3.9%16.9%7.7%Back-end$4,867 $5,131 $5,767 $5,914$4,855 $5,133 $5,768 $5,918QoQ-17.2%5.4%12.4%2.5%-17.9%5.7%12.4%2.6%

21、Upstream sales (US$)15,527 15,122 16,590 17,57914,174 14,813 17,083 18,108QoQ-11.8% -2.6%9.7%6.0%-19.4%4.5%15.3%6.0%2013201420152016201720182019$26,913 $32,192 $33,779 $38,255 $41,524 $43,139 $42,50515.0%19.6%4.9%13.3%8.5%3.9%-1.5%$15,691 $17,647 $18,101 $18,965 $21,085 $21,678 $21,6748.7%12.5%2.6%4

22、.8%11.2%2.8%0.0%$42,604 $49,839 $51,881 $57,220 $62,610 $64,817 $64,17812.6%17.0%4.1%10.3%9.4%3.5%-1.0%2013201420152016201720182019$40,969 $43,155 $42,366 $44,939 $48,197 $51,154 $50,7234.6%5.3%-1.8%6.1%7.3%6.1%-0.8%20132014201520162017201820191,0191,3031,4381,5441,4621,4601,39840.5%27.9%10.3%7.3%-5

23、.3%-0.2%-4.2%2052252212302672782770.7%10.1%-1.8%3.7%16.1%4.2%-0.4%25927424222820119518163.3%5.9%-11.6%-5.9%-11.9%-2.7%-7.2%316307281258255258257-10.9%-2.8%-8.4%-8.4%-1.0%1.1%-0.4%1,7992,1102,1832,2592,1842,1902,11324.8%17.3%3.5%3.5%-3.3%0.3%-3.5%Semi Customer sales1Q182Q183Q184Q181Q19E2Q19E3Q19E4Q19

24、EFabless/IDM Customers11,20312,54714,05313,35111,61511,84713,98013,281QoQ-13.0%12.0%12.0%-5.0%-13.0%2.0%18.0%-5.0%Downstream units1Q182Q183Q184Q181Q19E2Q19E3Q19E4Q19ESmartphone units344.7353.9377.5383.5325.9342.2370.6359.5QoQ-12.3%2.7%6.7%1.6%-15.0%5.0%8.3%-3.0%TV units68.269.670.369.666.868.170.271

25、.6QoQ-6.8%2.0%1.0%-1.0%-4.0%2.0%3.0%2.0%Tablet units49.547.048.050.844.743.845.247.4QoQ-20.0%-5.0%2.0%6.0%-12.0%-2.0%3.0%5.0%PC units59.360.467.970.364.064.365.463.3QoQ-14.4%1.9%12.4%3.5%-9.0%0.5%1.8%-3.3%Total Demand Units (mn)521.7530.9563.6574.1501.4518.5551.4541.8QoQ-12.7%1.8%6.2%1.9%-12.7%3.4%6

26、.3%-1.7%Figure 4: A flat year requires a 2H19 hockey stick for semiconductors (in mn, unless otherwise stated)Source: Company data, Credit Suisse estimatesFigure 5: China smartphones may trough in 1H19Figure 6: Smartphone replacements stretchingChina smartphoneChina smartphoneSmartphone units (mn)Re

27、placement rate (Years)shipment (mn units)129 136151106112 113 119 117104 102 103103 1088283 912001601208040-(40)(80)1Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q181Q192Q193Q194Q19(120)YoY growth (%)50%40%30%20%10%0%-10%-20%-30%2,1001,8001,5001,20090060030007.06.05.04.03.02.01.020180.0Smartphone uni

28、tsReplacement rate2008200920102011201220132014201520162017China smartphone shipmentYoY (%)Source: Credit Suisse estimatesSource: Credit Suisse estimatesWe publish our takeaways from the tech companies attending AIC which featuring 300companies and 2,000investorsHigh inventory and a lull in product c

29、ycles has driven a deep 1Q19 bottom and slow and uneven recovery in 2Q19TSMCs rebound on 7nm in 2H19 to lift sentiment after the disappointing slowdown and soft 1H19AIC 2019: Raising TSMC/Mediatek targets, chain slowly lifting off a deep bottomWe published our takeaways from the tech companies atten

30、ding our 22nd Asian Investment Conference which featured 300 companies and 2,000 investors including a number of large cap regional tech companies. We published our takeaways from the relevant tech companies attending the AIC including the chip companies within our semiconductor coverage including f

31、oundries TSMC, SMIC, and Hua Hong; back-end including ASE, Inari, and ASM Pacific and IC Design (Mediatek) and notable tech companies spanning hardware (Samsung Electronics, Xiaomi and Lenovo), components (Q-Tech, Soulbrain, TPK), telecoms (China Mobile, China Unicom and China Telecom), wafers (Silt

32、ronic), equipment (ASML) and automation (Airtac).The tech supply chain feedback was consistent with a view of a deep bottom in 1Q19 but only modest improvement in 2Q19 followed by some potential for more normal 2H19. By subsector, smartphones are still tracking to a full year modest decline for both

33、 Apple and China smartphones but is seeing slightly better order trends. Component suppliers have seen a small rebound from depressed 1Q19 levels for iPhone components after emerging market retail price cuts and China smartphones are seeing a healthy pick-up in March on new model launches across the

34、 top 4 China brands as well as pre-emptive inventory building by Huawei to buy it time to negotiate any sudden technology import ban. The auto/industrial channel is still mixed, with selective high-end / high voltage discretes still healthy on EV demand but broad MCUs/analog seeing only modest pick-

35、up in 2Q19.Within compute, notebooks still have lingering CPU constraints in 1H19 although servers are continuing to see some recovery from the late-2018 slowdown, with US hyperscale orders rebounding in 1Q19 and China customers expecting to pick-up by 2Q19. Full-year outlook for servers is still fo

36、r around 10% growth with hyperscale up 15% and enterprise flat to down slightly.Overall though, the mixed demand environment is impacting the semiconductor production chain, with foundries flat to down on capex and memory makers trimming utilisation (Toshiba, WDC and Micron). The raw wafer makers ar

37、e also seeing customers push back wafer production schedules and TSMC, SMIC and Hua Hong all noted intention to be renegotiating wafer pricing later this year and taking effect on 2020 pricing.In 2Q19, we expect the semiconductor supply chain to only see a modest improvement due to negative impact f

38、rom ongoing inventory digestion and muted demand outlook. Although most of the companies still expect a meaningful recovery in 2H19 to keep full year business flat YoY, the high bar for HoH growth and macro uncertainty could put their guidance at risk.Stock-specific tone at the AICFor stocks, tone f

39、rom the AIC is consistent with our more positive view on both TSMC and Mediatek among the large caps in our coverage. TSMC is set for gains on 5G with share gains into Qualcomm, AMD and Huawei and from higher silicon content in 5G phones, level 2/3 autonomous vehicles and IoT smart appliances. Media

40、tek has potential for mild upside from GMs rebounding to 40%+ on better mobile mix/costs, higher growth from its higher margin growth products outside smartphones, and areas to grow into networking, automotive communications and with the start of the 5G device cycle from mid-2020.We see favourable o

41、utlook for several small-mid cap semiconductor stocks including: Inari (improving RF outlook with share gains in flagship smartphone and higher content in 5G), Kingpak (automotive CIS growth continuing) and Realtek (growth from IoT/networking/connectivity). Among the China foundries, Hua Hong should

42、 grow mildly as local China customers gain share in discretes and MCU although will enter a transition to lower profitability growth as it starts production and needs to fill its 12 fab from late-2019.iPhone and Android orders stabilize after Chinese New Year, Huawei building up buffer inventory to

43、shield fromany sudden banSMIC should see improving business outlook and progress on advanced nodes but profitability is still dampened by under-utilised 28nm and aggressive expansion in the past few years.AIC takeaways for the semiconductor universeKey topics and themes at AIC this year include:Busi

44、ness slowdown in 1H19 from high inventory levels and soft demand could risk full- year flat expectation.China smartphone brands starting to rebound in March into 2Q19 on new product launches and inventory restocking.Broader semi inventory correction may continue into 2Q19 due to soft demand from mac

45、ro uncertainty.Bare silicon wafer pricing could be negatively impacted by the semiconductor slowdown across foundries and memory makers despite some protection from long term supply agreements.5G telco enthusiasm muted due to delay in technology progress and cautious investment from telecom operator

46、s, though plans still moving ahead for 2020 commercial roll-outs in urban cores.We summarise in more depth the main semiconductor takeaways and also more detailed updates from our tech teams meetings in the hardware and semiconductor supply chain.Outlook for only gradual sales growth, 2H a high barT

47、he demand outlook for the tech supply chain is at least stabilising at a lower level into 2Q19 following the downward revision for expectation in the past few quarters. Despite improving customer confidence and some short-term rush orders, most of the companies only expect a mild QoQ recovery in 2Q1

48、9 before a more meaningful pick up in 2H19 as customers are unwilling to build inventory as tech end market demand is dragged by a lull in product cycles and concerns of macro softness continuing. Global smartphone units should still continue to decline mildly as limited spec upgrades toward the end

49、 of the 4G cycle stretches replacement cycles in developed countries and China to offset still some penetration growth in emerging markets.Figure 7: A flat year requires a 2H19 hockey stick for semiconductorsAsian Upstream sales1Q182Q183Q184Q181Q19E 2Q19E 3Q19E 4Q19EFoundry$10,660 $9,991 $10,823 $11

50、,665$9,318 $9,681 $11,315 $12,190QoQ-9.0% -6.3%8.3%7.8%-20.1% 3.9% 16.9% 7.7%Back-end$4,867 $5,131 $5,767 $5,914$4,855 $5,133 $5,768 $5,918QoQ-17.2% 5.4%12.4% 2.5%-17.9% 5.7% 12.4% 2.6%Upstream sales (US$)15,527 15,122 16,590 17,57914,174 14,813 17,083 18,108QoQ-11.8% -2.6%9.7%6.0%-19.4% 4.5% 15.3%

51、6.0%Semi Customer sales1Q182Q183Q184Q181Q19E 2Q19E 3Q19E 4Q19EFabless/IDM Customers11,203 12,547 14,053 13,35111,615 11,847 13,980 13,281QoQ-13.0% 12.0% 12.0% -5.0%-13.0% 2.0% 18.0% -5.0%Downstream units1Q182Q183Q184Q181Q19E 2Q19E 3Q19E 4Q19ESmartphone units344.7353.9377.5383.5325.9342.2370.6359.5Qo

52、Q-12.3% 2.7%6.7%1.6%-15.0% 5.0%8.3%-3.0%TV units68.269.670.369.666.868.170.271.6QoQ-6.8%2.0%1.0%-1.0%-4.0%2.0%3.0%2.0%Tablet units49.547.048.050.844.743.845.247.4QoQ-20.0% -5.0%2.0%6.0%-12.0% -2.0%3.0%5.0%PC units59.360.467.970.364.064.365.463.3QoQ-14.4% 1.9%12.4% 3.5%-9.0%0.5%1.8%-3.3%Total Demand

53、Units (mn)521.7530.9563.6574.1501.4518.5551.4541.8QoQ-12.7% 1.8%6.2%1.9%-12.7% 3.4%6.3%-1.7%2013201420152016201720182019$26,913 $32,192 $33,779 $38,255 $41,524 $43,139 $42,50515.0% 19.6% 4.9% 13.3% 8.5%3.9%-1.5%$15,691 $17,647 $18,101 $18,965 $21,085 $21,678 $21,6748.7% 12.5% 2.6%4.8% 11.2% 2.8%0.0%

54、$42,604 $49,839 $51,881 $57,220 $62,610 $64,817 $64,17812.6% 17.0% 4.1% 10.3% 9.4%3.5%-1.0%2013201420152016201720182019$40,969 $43,155 $42,366 $44,939 $48,197 $51,154 $50,7234.6%5.3% -1.8% 6.1%7.3%6.1%-0.8%20132014201520162017201820191,019 1,303 1,438 1,544 1,462 1,4601,39840.5% 27.9% 10.3% 7.3% -5.

55、3% -0.2%-4.2%2052252212302672782770.7% 10.1% -1.8% 3.7% 16.1% 4.2%-0.4%25927424222820119518163.3% 5.9% -11.6% -5.9% -11.9% -2.7%-7.2%316307281258255258257-10.9% -2.8% -8.4% -8.4% -1.0% 1.1%-0.4%1,799 2,110 2,183 2,259 2,184 2,1902,11324.8% 17.3% 3.5%3.5% -3.3% 0.3%-3.5%(in mn, unless otherwise state

56、d)Source: Company data, Credit Suisse estimatesBroad based IDM business still somewhatsoftThe soft demand for automotive and industrial applications and high distribution inventory is continuing to slow the pick-up from the low levels for IDM customers, with Renesas already lowering production and I

57、nfineon revising down guidance this week. Data centerChina smartphones pick- up on launch of newmodelsdemand at least is now recovering as underlying cloud revenue growth at the service providers remains strong and also can start to deplete high memory inventory by 2H19. With most of the companies s

58、till expecting at least flat year in 2019 following the slowdown in 1H19, the bar is high for 2H19 and may only be achievable with market share gains or exposure to higher growth areas including early 5G infrastructure builds and still healthy IoT connectivity demand.China smartphone builds resuming

59、China smartphone demand has been soft through 2018 and saw another 14% YTD decline through February this year. However, we believe builds are recovering from March through 2Q19 supported by restocking demand and new model launches, with Mediatek noting already low channel inventory following the dig

60、estion in the past few quarters and now a pick-up in activity implying large March MoM sales to reach mid-high end of guidance. In addition, China smartphone brands are also more aggressive expanding into India and other emerging markets due to already saturated domestic demand, with Xiaomis 30% mar