The Credit Suisse Asian Technology Conference is live this week. Credit Suisse pointed out that tech industry will be welcomed with a bright prospect for the next two years under the impulsion of critical growth factors such as 5G promotion, new iPhone announcement, and the development in edge computing, as well as the support from AI and EVs.
Manish Nigam, Head of Tech Research for Asia Pacific at Credit Suisse, commented that the semiconductor industry remains the most favored field for investment as the shortages of the supply chain, coupled with the robust competition tendency, and the constantly thriving growth in profitability for businesses, are expected to carry on until 2022. The actuation from structural demand and the global economic recovery within the next several years will continue to infuse growth opportunities for the Asia tech environment.
In addition, Credit Suisse also pointed out that the growing tendency of EVs that has lasted for multiple years will benefit the global semiconductor industry. The adoption rate of EVs had increased significantly in the past 10 years from 1% in 2010 to 8% in 2019 primarily owing to stricter emission standards. The government is expected to fully suspend fossil fuel vehicles between 2030 and 2035, whereas factors such as the elevation in driving range and charging time have strengthened the determination of OEMs in a comprehensive electrification.
The penetration rate of EV and HEV had arrived at 11.5% in 2020, and is expected to rise to 34% in 2025, before ascending to 62% in 2030, while the quantity of EV and HEV will magnify from 8 million units in 2020 to 63 million units in 2030, which equals an increase of more than sixfold.
Credit Suisse commented that the average semiconductor value for a single car is expected to double from US$510 in 2020 to US$1,100 in 2030 alongside the constantly rising adoption by EV and HEV. As the super tendency of EV actuates a CapEx growth in the auto semiconductor market, the overall industry is expected to achieve a revenue of US$110 billion in the future, with a compound annual growth rate of 11%.
Randy Abrams, the Managing Director and Head of Taiwan Equity Research, commented that the transition from fossil fuel cars to EV, as well as the regulatory measures for EV that are encouraged by the government, are expected to result in a compelling growth in EV demand, especially for the EU and China, for which the two had combined to approximately 2/3 of the overall EV market during 2020. Although the two regions continue to lead in the competition, the US and Southeast Asia are also catching up as we speak. On the whole, the aforementioned development will provide a support for the increment in semiconductor demand and benefit the global semiconductor industry.
Credit Suisse is also optimistic towards the shipment volume of smartphones, and expects a further surge from the 1.28 billion units during 2020. Credit Suisse also believes that iPhone shipment will maintain at a higher level for the several subsequent years after the prominent growth in 2021. The excellent cyclical trend of iPhone 12 is propelled by the sales of iPhone Pro/Pro Max series, as well as the lower base period for growth.
Abrams commented that he is optimistic pertaining to the catalysis of 5G on the upgrades and replacement of iPhone, though the focus may gradually shift from the early adopters of the iPhone Pro model to the mainstream iPhone customers that have now exceeded 1 billion. iPhone shipment is expected to arrive at 234 million units in 2021, which is a YoY growth of 15%.
(Cover photo source: Credit Suisse)
