Japanese Apple supplier Taiyo Yuden bullish on 2020 as China’s 5G phone demand kicks in
- Taiyo Yuden, which supplies parts to smartphone makers including Apple, has seen Chinese makers drive early demand for 5G stations and handsets
- The Japanese company’s shares have more than doubled this year, despite slowing smartphone shipments
Taiyo Yuden, a Japanese maker of ceramic capacitors used in smartphones including Apple’s iPhone, sees increasing demand for its components next year as China pushes ahead with the fifth generation of cellular technology.
“We’re already getting orders for 5G base stations,” chief executive officer Shoichi Tosaka said in an interview on Thursday. “Early next year we should start seeing 5G-related orders for smartphones.”
Huawei Technologies and ZTE Corp have led the orders for capacitors used in base stations, Tosaka said. The demand is coming mostly from Chinese carriers, after the Trump administration pushed US allies to exclude Chinese suppliers from their networks. Huawei may sell 100 million 5G-enabled smartphones in China alone next year, Tosaka said.
This should have been a bad year for Taiyo Yuden, as smartphone shipments have sputtered and the US government blacklisted one of its biggest customers in Huawei. Instead, the company has stuck to its May forecast for record revenue and profit. Demand for its capacitors has proven resilient to geopolitical shocks largely because they are components used in large numbers across all kinds of electronic devices – from smartphones to electric cars. Taiyo Yuden’s shares have more than doubled this year.
The first batch of 5G-enabled iPhones, whenever they come, will “open up the floodgates” on device upgrades, Wedbush Securities predicted this month. About 350 million iPhones among the Cupertino, California company’s 900 million installed user base are now in the window of an upgrade opportunity, analyst Dan Ives wrote in a note to clients.