Summary of Conference Call Notes Industry Overview - **Industry Focus**: North America Hardware & Storage and Electronic Components & Equipment [1] - **Key Insight**: Significant impacts from recent tariff announcements affecting hardware due to reliance on Asian manufacturing hubs [2] Core Points and Arguments - **Hardware Impacts**: - Limited domestic manufacturing exposure leads to reliance on Asian hubs now facing tariffs [2] - PC OEMs expected to absorb tariffs through price hikes; relocation of manufacturing is not economically viable in the near to medium term [2] - Increased reliance on Mexico as a partial offset due to paused tariffs on USMCA-compliant goods [2] - Anticipated lower demand due to recessionary pressures on the US economy [2] - Servers and networking sectors are better positioned compared to consumer devices due to lower price elasticity [2] - Enterprises may extend the use of existing storage assets due to software contributions in storage sales [2] - **Component Impacts**: - Limited direct impact on component manufacturers as they primarily ship to assemblers/ODMs/OEMs [3] - HDD manufacturers with significant operations in Thailand may face challenges [3] - Companies like Corning, Amphenol, and TE Connectivity have diversified end markets, reducing direct supply chain impact [3] - **Overall Impact Assessment**: - Companies with high consumer device exposure, lower gross margins, and significant US revenue reliance are likely to be most negatively affected [4] Additional Important Information - **Companies Mentioned**: - Amphenol Corp, CDW Corp, Corning Incorporated, Cricut Inc, Dell Technologies, HP Inc, Logitech International, NetApp Inc., Pure Storage, Seagate Technology Holdings PLC, TE Connectivity Ltd., Western Digital [9] - **Analyst Contact Information**: - Asiya Merchant, CFA and Michael Cadiz provided their contact details for further inquiries [5] - **Research Context**: - The report is part of Citi Research, which may have conflicts of interest due to business relationships with covered companies [5][12][13][14] Figures and Data - **Figure 1**: Illustrates tariff impacts across coverage [6] - **Figure 2**: Depicts end market spending year-over-year [8] This summary encapsulates the key insights and implications from the conference call, focusing on the hardware and components sectors in light of recent tariff developments.