TSMC(US:TSM)2025-11-10 04:47Summary of Apple Supply Chain Conference Call Industry Overview - The focus is on the Apple Supply Chain, particularly regarding upcoming form factor changes in Apple products, which are expected to drive growth momentum and enhance valuations [1][22]. Core Insights and Arguments - Form Factor Changes: Anticipated changes include a slim model in 2025, foldable phones in 2026, and the 20th iPhone in 2027, which are expected to support end demand and increase supply chain dollar content [1][22]. - Valuation: Many Apple Supply Chain stocks are currently trading below their 3-year average P/E ratios, indicating attractive valuations [1][18]. - Technology Leaders: Companies that are technology leaders are expected to benefit as brand customers increasingly rely on them for new components that fit the new form factors [2][22]. - Hinge Components: There is a positive outlook on hinges for foldable phones due to better average selling prices (ASP) and gross margins compared to traditional PC hinges [2][22]. Key Companies and Recommendations - Buy Recommendations: - Hon Hai (2317.TW): Strong execution and experience in iPhone assembly, expected to gain market share and dollar content increases [3][24]. - Largan (3008.TW): Anticipated recovery in market share and gross margins due to reliance on technology leaders for premium camera components in foldable phones [3][26]. - AAC (2018.HK): Expected to benefit from stabilization in competition and potential allocation in new form factor models [3][27]. - TSMC (2330.TW): Key foundry partner for Apple, expected to benefit from new technology adoption in upcoming iPhone models [3][30]. - SZS (3376.TW): A leading supplier of hinges, expanding capacity to meet demand for foldable devices [3][25]. Market Trends - Foldable Phone Growth: Global shipments of foldable phones increased by 144% QoQ and 22% YoY in 3Q25, indicating a growing trend towards foldable devices [15][17]. - Premium Market Share: The ASP for foldable phones rose by 14% QoQ and 12% YoY, reflecting consumer preference for premium models [17][22]. - Penetration Rates: Base case estimates for foldable iPhones suggest penetration rates of 4% in 2026 and 11% in 2027, with a bull case suggesting rates of 14% and 26% respectively [15][22]. Risks and Considerations - Market Confidence: The current low trading ranges of Apple Supply Chain stocks may reflect market skepticism regarding smartphone demand [18][22]. - Competition: Potential risks include slower-than-expected demand for foldable phones and increased competition among suppliers [33][34][36]. Conclusion - The Apple Supply Chain is poised for growth driven by upcoming product innovations and favorable market dynamics. Key players are recommended for investment based on their strategic positioning and expected benefits from the transition to new form factors.