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Author: Icon8888   |   Latest post: Mon, 25 Nov 2019, 11:10 AM

 

(Icon) 5G Arrives Earlier Than Expected, Start Paying Attention To Technology Stocks

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1. 5G At Our Doorstep

 

The semiconductor industry is famous for its boom bust cycles. The latest down cycle started around January 2018, about one and a half year ago, But recently, there are indications that the worst is behind us and the industry is entering a new boom cycle. 

 

The main growth driver is 5G. As early as few months ago, 5G was still a vague concept. But if you have been following developments in the semiconductor industry, you will notice that 5G is fast becoming a reality. Hardware producers such as Huawei, Ericsson and Nokia are busy getting base stations ready for mobile operators while smart phone makers such as Apple, Huawei, Xiaomi, Oppo, Vivo and Samsung are placing orders for new chips for their upcoming 5G phones.

 

 

2. A Supercycle, Bigger Than Anything We Have Ever Seen Before   

 

Who are the beneficiaries ? To answer this question, we need to look at what 5G can do. 

 

First of all, 5G is fast. This means that 5G base stations and smart phones will have to make use of the most advanced chips in town. This will benefit makers of modem and processors such as Qualcomm, Broadcom, Intel, AMD, Nvidia, Xilinx, etc. 

 

Secondly, 5G need huge memory. Due to its high speed, 5G users can do many things that 4G cannot do. For example, Augmented Reality, highly sophisticated Games, etc. As such, 5G phones will have substantially higher memory storage than those of 4G. For example, Samsung's recent 5G phone will have 12GB memory. This will benefit producers of Solid State Memory. Micron is one good example.

 

With its huge bandwidth and capacity, 5G will also enable Internet of Things. Millions and billions of appliances and gadgets used in our daily life such as air cond, lighting, security devices, medical devices, pumps, compressors, engines, machines, etc will in the future be linked to data centres via internet, creating a smart society whereby real time information are continuosly transmitted, monitored and processed so as to optimise performance. This will benefit makers of sensors and passive components.

 

This will in turn create the need for servers to process all the information. This will benefit server makers and Hard Disc Drives manufacturers.    

 

On top of that, the advent of articifical intelligence and autonomous driving (enabled by 5G) will also create huge demand for semiconductors. 

 

In view of the foregoing, I believe that we are entering a super boom cycle for semiconductors that can last for many, many years. In the coming next one or two quarters, technology companies such as Inari, MPI and Unisem might be releasing weak results due to lag effect. But don't write them off. Keep an open mind and look for opportunities. We could be entering a golden era for technology stocks. 

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  9 people like this.
 
qqq3 Trump's technology war means TSMC is the best share in the world......................
20/08/2019 6:04 PM
Up_down TSMC is giant blue chip so we can't punt growth stock like what we do in KLSE.

Posted by Icon8888 > Aug 20, 2019 5:49 PM | Report Abuse

TSMC July sale 700 bil TWD per month

But because of 5G, sales in October November and December will be 1 bil TWD per month

The growth is already here
20/08/2019 6:08 PM
Icon8888 It is a blue chip that is about to grow like a 16 years old
20/08/2019 8:11 PM
supersaiyan3 Good one. There hasn't been a great article like this one for a long time.
20/08/2019 8:22 PM
Icon8888 Memory firms expect explosive growth from 5G starting 2020
Siu Han, Taipei; Willis Ke, DIGITIMES Tuesday 13 August 2019 0 Toggle Dropdown
Despite lackluster memory demand likely to persist till the end of 2019, the memory industry is expected to see a brighter prospect starting 2020 when 5G services kick off commercial runs driving the popularity of 5G terminal devices that will in turn generate strong growth for memory products, according to industry sources.

The sources said that the 5G commercialization will stimulate upgrades of datacenter servers, and the resultant strong demand for high-capacity server memory will come first to bail the memory industry out when operators move to accelerate establishment and expansion of datacenters.

The sources said the Tokyo Olympics 2020 and the commercialization of 5G services will trigger a positive cycle of investment expansion, stimulating buying sentiment at the consumer end and prompting telecom operators and web service firms to increase their investments in datacenters by 3-4 folds to support the use of 5G mobile devices.

Sumit Sadana, executive vice president and chief business officer at US-based Micron Technology, said that his company will zero in on business opportunities from the ever-growing 5G, AI, IoT and autonomous driving applications, which will create new business models and spur upgrades in memory and storage solutions.

For mobile devices to fast transmit data on 5G bandwidths, high-performance DRAM and NAND flash products will be badly needed along with a new wave of replacement demand for 5G smartphones. In this regard, Micron estimates smartphone storage capacity will sharply expand from 512GB in 2019 to 1TB by 2021 when data transmission speed hits 20Gbps.

Taiwan memory firms revving up deployments

To cash in on immense 5G-driven business opportunities, Taiwan's memory supply chain is also aggressively proceeding with relevant deployments.

Nanya Technology president Pei-Ing Lee said that 5G commercialization will bring two major impacts on the memory market. First is that mobile devices will require bigger memory capacity support. Some flagship smartphones launched so far in 2019 come with 12GB memory, and some midrange models with 6-8GB. Second is that demand for network devices including routers, servers and cloud computing solutions will grow sharply. Accordingly, Nanya started small-volume server memory shipments in the first half of 2019 and will ramp up shipments in the fourth quarter, expecting the shipment ratio for such memory to reach 10% in 2020.

Macronix is eyeing the first wave of 5G opportunities from femtocells, which will grow exponentially in number, and it is cooperating with vendors of network equipment, APs, routers, and Internet of Vehicles (IoV) equipment to jointly tap the opportunities. Macronix is optimistic about strong demand for high-capacity NOR memory products, bolstered by a spate of new applications created by V2X (vehicles to everything).

Meanwhile, Winbond has recently released its 2Gb NAND+2Gb LPDDR4x MCP (multi-chips package) modules to support the operation of high-speed 5G terminal devices,

Innodisk chairman Randy Chien said his company expects to have as many as 300 AIoT clients by the end of 2019, up from less than 100 in 2018, ready to embrace drastic business expansion after 5G commercialization kicks off in 2020.

Adata Technology chairman Simon Chen noted 5G, AIoT and telematics will be the three major growth drivers for the global memory market starting 2020, with demand to explode in 2021-2022 in the largest-ever bull market for memory.
20/08/2019 8:38 PM
Philip (Can I advise you?) Here is my take on 5G after some further reading.

5G isn’t one technology, but a complex collection of technologies, many of which have not been sorted out by the standards bodies.

In general, however, it’s helpful to oversimplify the explanation about how 5G works. So here goes.

The technologies behind 5G enable the use of very high frequencies. The higher the frequency, the shorter the wavelength. Shorter wavelengths enable faster speeds and lower latency.

But there’s the catch: With shorter wavelengths, the distance between the device and the “tower” has to be much shorter, and the signal has a harder time penetrating through materials such as walls and trees. To get around those obstacles, companies need to deploy vastly more towers than existing technologies do. And companies such as Verizon are using beamforming to direct signals around objects and toward devices.

In order to have reasonable coverage, providers have got to build 5G antennas and towers all over the place, and very close to users. It’s time-consuming and expensive to place these devices everywhere, so the rollout will be slow and uneven.

Because 5G connections suck more power, the chips that power 5G will be designed to favor 4G and kick into 5G mode only when the application demands high bandwidth.

In essence, 5g will take a lot longer ( 10 years+) to really get things together before it becomes something really useful.

We will probably need to wait a lot longer before you can move everything into the cloud and start buying rm50 smartphones ( which only need screen and sound), get smart car access everywhere and all those IoT dreams like Ironman movies.

In essence the jump from 2g to 3g to 4g is quite similar (upgrading of existing cell tower equipment) I know this because I just installed a signal booster in mukah water treatment plant that gave me strong celcom connection locally. It's basically the same device

But the jump from 4g to 5g is on an entirely different scale altogether. It's almost an entirely new technology all together. I'm not sure who will actually be the beneficiary of the new technology or which company will actually be profitable from it long term.
20/08/2019 10:16 PM
miketyu mind to enlighten which semicon is related to 5G besides inari and penta?
20/08/2019 10:25 PM
michaelwong A new version in high speed internet technology around the globe that can benefitted many semiconductor stakeholders . Dufu share price has been performing impressively of late not to mention those under Forbes list unisem, vitrox and etc .
20/08/2019 11:45 PM
qqq3 Posted by (HK1997 again) Philip > Aug 20, 2019 10:16 PM | Report Abuse


But the jump from 4g to 5g is on an entirely different scale altogether. It's almost an entirely new technology all together. I'm not sure who will actually be the beneficiary of the new technology or which company will actually be profitable from it long term.
======

Philips has a good balanced take on 5G.

Magic will happen in China.....for Malaysia, it be be a long time.
20/08/2019 11:56 PM
qqq3 memories and chips....Trump's technology war with China means every thing is up for grabs.....but TSMC seems poised to benefit the most..........
20/08/2019 11:59 PM
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21/08/2019 1:54 AM
UnicornP HDD manufacturer -> Notion Vtec -> Expect mass production in 2020.
21/08/2019 8:59 AM
qqq3 TSMC....did u buy from Taiwan stock exchange or from NYSE depository receipt?
21/08/2019 11:20 AM
qqq3 whether 5G or memory chips, Bursa shares don't work the way u expect..................................
21/08/2019 11:23 AM
qqq3 my own experience...foreign shares not suitable for me.........too much leakage, transaction costs...........
21/08/2019 1:36 PM
Icon8888 I bought using my local broker account

Just choose NYSE instead of Bursa

I click buy and sell just like I buy Vitrox
21/08/2019 1:56 PM
Icon8888 TSMC to see revenues surge in 2020
Monica Chen, Hsinchu; Jessie Shen, DIGITIMES Wednesday 21 August 2019 0 Toggle Dropdown
Growing chip demand for 5G- and AIoT-related applications will boost TSMC's revenues for 2020, which are expected to climb over 10% on year, according to industry sources.

TSMC is also set to generate record-high profits next year, driven by growing sales from 7nm and more advanced process technologies, the sources indicated.

TSMC should be able to see its revenue growth continue to outperform the industry average this year, said the sources, adding that the pure-play foundry is expected to post a slight revenue increase in 2019.

Nevertheless, TSMC is unlikely to post another year of record-high profits this year, due to lower-than-expected profits during the first half of the year, the sources continued.

TSMC has started volume production of chips built using N7+, the foundry's first process node with EUV lithography, since the second quarter of 2019. Huawei, Apple, AMD and Qualcomm are reportedly among TSMC's EUV customers.

TSMC's N7+ node is believed to be more competitive than rivals' due to higher and more stable yield rates, the sources believe.

In addition, TSMC has introduced its 6nm process incorporating EUV with risk production scheduled for the first quarter of 2020. Target applications include high-to-mid end mobile, consumer applications, AI, networking, 5G infrastructure, GPU, and high-performance computing.

As for TSMC's 5nm process technology, regarded by the foundry as "a large and long-lasting node," volume production is slated to kick off during the first half of 2020. Apple is reportedly among the first customers adopting the foundry's 5nm EUV process.

Demand for TSMC's EUV processes is set to become robust starting 2020, when 5G commercialization kicks off, according to market watchers. The availability of 5G networks will be driving chip demand for various terminal devices ranging from network equipment, smartphones, IoT, HPC to automotive.

TSMC CFO Lora Ho said at the company's investors meeting in July that the foundry expects to post an around 18% sequential increase in third-quarter revenues, thanks mainly to growing demand coming from the smartphone and IoT sectors. Ho continued that she believes the fourth quarter will be an even stronger quarter for TSMC, as chip demand for smartphones continues to ramp up coupled with a pick-up in demand for HPC applications.
21/08/2019 2:03 PM
Icon8888 You probably do not understand how strong TSMC market position and prospect is, there is why you are not so passionate

I bet quite big. 10% of my portfolio
21/08/2019 2:05 PM
Icon8888 I describe TSMC as Low potential return but high probability of successs

I will be happy with 50% return in three years
21/08/2019 2:07 PM
qqq3 I already read TSMC 7nm chips more advanced than Intel.........and if US cannot sell to Huawei, who they turn to ? TSMC, of course........
21/08/2019 2:22 PM
mcmann Thanks Icon8888 will study TSMC
21/08/2019 2:26 PM
mcmann apart from TSMC what are local company will benefit from this 5G era ?
21/08/2019 2:26 PM
Icon8888 Huawei currently has its own chips

It doesn't need US to sell to it

But it purposely reserve 60% for US companies (consider that as protection fee ?)

If US doesn't want to sell them, they will go to TSMC to produce the remaining 60% using their own chip design
21/08/2019 2:31 PM
qqq3 y Icon8888 > Aug 21, 2019 2:31 PM | Report Abuse

Huawei currently has its own chips
==========

There is a wide range and variety of chips....Takes many years before Huawei is self sufficient............
21/08/2019 2:43 PM
Icon8888 They can live without US chips, but will have to sacrifice some performance

For example, if they can't get Qualcomm latest modem chips , they won't go bust. They can use back their own less efficient chip, but probably need to add some cooling mechanisms

So it still will work, but might be a bit more bulky

That is the way I understand it
21/08/2019 3:00 PM
qqq3 Taipeh stock exchange stock code 2330.........

I have to buy through HK........

NYSE depository receipt, what is the stock code?
21/08/2019 3:02 PM
qqq3 I am a trader.....for traders, Bursa is enough....other exchanges too much leakages, double commissions and forex....as a trader, London biscuit drop to 11 , now 14 , I got too much at 16, dare not average at 11.............


For investors who keeps a couple of years, transaction costs are not relevant.....................
21/08/2019 3:12 PM
qqq3 what about Frontken? Can do research on Frontken........?
21/08/2019 3:13 PM
UnicornP So far 5G hot stocks : OSAT(Inari), ATE(Penta, Vitrox), Semicon back-end(Frontkn), HDD(Dufu, Notion).
21/08/2019 4:08 PM
mcmann thanks unicorn
21/08/2019 8:35 PM
Andre Kua Even though 5G is the next big thing, I dont see there would be drastic action in the next 2 years at the very least.

Unless you are really a geek, you probably have no idea what 5G really is all about except that you know its great in speed. In reality, it is a bit more complex than that. 5G technology is so different than 4G that it poses technological challenges that 4G dont face. The biggest one would be coverage. It operates on a much higher frequency band and as with higher frequency band, the signal dont travel a great distance. Higher frequency also have harder time penetrating materials.

Hence I think for certain countries (I think Malaysia included), you will only get 5G in dense area like city center, universities or government buildings. 5G would benefit since the deployment area is not too big and have huge users to utilize the additional bandwidth gained with 5G. Whereas for the rest, we will most probably be stuck with 4G for 2-3 more years until they made a huge step forward to increase the range of the tower as well as reducing the cost of the equipment even further. As for now, I think only certain countries will be benefiting from 5G roll out.
22/08/2019 8:09 AM
UnicornP But all the semicon bosses very upbeat of the 5G business prospect wor. Who are we to oppose? If you scared you wait and see the next quarter earnings only decide lo. They say 2019 second half business will rebound strongly.
22/08/2019 10:48 AM
laychee So far no one talks about the companies that preparing to make money from this big pie.

Tun M visit to China is making 5G a viable upgrade.

But Malaysians will be using it to download movies instead of performing surgical operation during vacation far away from hospital.
22/08/2019 11:09 AM
Andre Kua South Korea, Taiwan, Singapore and China (& HK) probably the first few to adopt it since tech is home grown and easy approvals from government.

As for others, I would say wait and see. Telecommunication industry is heavy reliant on frequency band bidding and allocation.
22/08/2019 11:20 AM
UnicornP 5G means the need to start making new mobile phones(Apple, Samsung). Making new mobile phones means the need to make new chips(TSMC,Micron) and test it(Inari,MPI). Making new chips means the need to make machines(Vitrox, Penta). Make machines means the need to maintain the machine(Frontken). New internet speed means the need to make new computer and thus hard-disk(Dufu) and gaming chips too(Nvidia).
22/08/2019 11:36 AM
UnicornP Then Andre you lucky liao. Inari and Penta's biggest market is Singapore. Vitrox's is China. Frontkn's is Taiwan.
22/08/2019 11:57 AM
UnicornP So far 5G hot stocks : OSAT(Inari), ATE(Penta, Vitrox), Semicon back-end(Frontkn, UWC), HDD(Dufu, Notion). Bonus: Salute
22/08/2019 3:58 PM
RainT if you invest in 5G related counters now,

then be prepare to hold at least until year 2020
22/08/2019 6:15 PM
RainT to make big money is to invest when nobody wants it

not when the price at the peak high

this goes to MPI and INARI
22/08/2019 6:16 PM
qqq3 RainT > Aug 22, 2019 6:16 PM | Report Abuse

to make big money is to invest when nobody wants it
==========

u talking about London biscuit? or armada?
22/08/2019 11:43 PM
UnicornP I reframe his word: to make big money is to invest when everybody panic about some kacang external issues like trade war & inverted yield curve
22/08/2019 11:59 PM
miketyu is MI equipment part of the ecosystem?
23/08/2019 8:46 AM
Armada An Quantum Leap Stock In 2019/2020 Yup. Mi is vitrox best close competitor.
23/08/2019 8:49 AM
miketyu Only that Vitrox has larger scale than MI right?
23/08/2019 9:20 AM
qqq3 https://www.investors.com/news/technology/5g-stocks-5g-wireless-stocks/?src=A00220&yptr=yahoo
23/08/2019 10:16 AM
qqq3 every year there will be a handful of stocks that will do well and a lot don't. If you spread your money into 50 stocks, at best a mediocre result, and unlucky can lose 10% or more. Because Bursa alone is so difficult , people like Philips and Icon have to go global to find out- performance.


https://klse.i3investor.com/blogs/qqq3/220949.jsp
23/08/2019 10:25 AM
Icon8888 I concentrate on TSMC

Average cost USD42
23/08/2019 2:14 PM
sc Khaw OCK as well
05/09/2019 11:58 AM
qqq3 Posted by sc Khaw > Sep 5, 2019 11:58 AM | Report Abuse

OCK as well
=========

actually u are right...as for 5 G......the only ones in Malaysia to benefit are the tower guys.......The telcos are just spending money ......
05/09/2019 12:14 PM
qqq3 .The telcos are just spending money ......and writing off old expenditures....tough for these guys so don't expect much..........
05/09/2019 12:15 PM


 

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