126罗兰贝格-供应链与人力资源.pdf

1、 Wireless Semiconductor Industry Initiating Coverage See last page for important disclosuresE Q U I T Y R E S E A R C H 1 July 7,2004 Blaine R.Carroll,CFA (617)428-5708 Investment Opinion:The wireless industry is undergoing a major upgrade cycle as operators roll out next-generation networks that of

2、fer customers enhanced features on their wireless devices such as Internet access,color screens,camera phones and audio and video capabilities.The industry is showing healthy growth in handset shipments as demand has increased and replacement time has shortened.Our preferred names within our coverag

3、e universe appear to be well positioned to take advantage of this upgrade cycle as they continue to strengthen their competitive position within the market.As such,we are initiating coverage on RFMD,SLAB,SWKS and TQNT with Buy ratings and ANAD with a Neutral rating.Upgrade Cycle Has Begun The long a

4、nticipated upgrade in the wireless industry has finally begun.The industry exhibited its first downturn during 2001 with a 7%decline in handset shipments to 380 million.After a slight uptick in 2002 to 400 million units,the industry rebounded in 2003 with a 28%increase to 510 million and 2004 looks

5、bright with projections now set at 610 million,or 20%growth.Increased Footprint Drives Improved Revenue Trends One of the main drivers of renewed revenue growth for the wireless semiconductor companies has been its expanding footprint within the handset market.Companies are driving their dollar cont

6、ent per phone up from the$1.50/handset range to$10-15 per phone.Profitability Main Area of Focus One of the major concerns for investors has been the ability for companies to deliver profitable growth in an environment where the supply chain continues to be squeezed.All companies within our coverage

7、 universe have major manufacturing and operating initiatives underway that will drive profitability in the future.SLAB has posted positive EPS for several quarters and RFMD and SWKS have recently reached positive EPS.TQNT should reach it next quarter.Valuations Very Compelling The wireless names are

8、 trading at very compelling valuations,with the pureplay names trading at less than 1.9X CY05 sales,well below historical valuations of 5-7X and recent valuations of 3.0X.BUY RF Micro(RFMD,$6.46)Silicon Labs(SLAB,$42.11)Skyworks(SWKS,$7.71)TriQuint Semi(TQNT,$4.52)NEUTRAL ANADIGICS(ANAD,$4.54)2Inves

9、tment Overview Handset Market Resumes Growth Trajectory The 1990s proved to be an historic era for cellular communications as the industry realized meteoric growth.However,as we entered the new century,the industry was plagued by a number of factors,such as the market correction,an industry-wide cap

10、ital crunch,SARS and other events that stalled the buildout of next-generation networks and devices.As a result,in 2001,the industry realized its first Y/Y declines in cellular handset shipments.Although shipments rebounded during 2002,the industry was still somewhat limping along.It was not until t

11、he end of 2003 that meaningful growth returned to the industry and we once again experienced strong Y/Y growth.As we move through 2004,carrier health is stronger as wireless operators realize the value proposition offered by these next-generation services,which increase the usage on their networks.A

12、dditionally,during the difficult times over the past couple of years,component suppliers and equipment manufacturers alike have realigned their cost structure and the industry seems poised for strong growth as consumers purchase next generation devices with color screens,Internet access and camera p

13、hones.We estimate that 2003 shipments topped 500 million and we expect that 2004 can surpass the 600 million mark.Handsets Once Again on the Rise 0100200300400500600700Wireless Handset Market ForecastWCDMA01282040PDC/PHS253032424535TDMA1205546302010GSM/GPRS210225230290335355CDMA556990140190220200020

14、012002A2003A2004E2005E380400510610660410 Source:Company reports and Oppenheimer&Co.Inc.estimates.3 Financials Beginning to Improve With the resumption in growth within the industry,we have seen an uptick in the financial condition of the component suppliers.Specifically,we expect revenue to grow 29%

15、and 18%,on average,during 2004 and 2005,respectively.Additionally,a number of the cost initiatives that the companies have incurred over the past couple of years,both within their manufacturing facilities and their operating activities,are beginning to flow through to the bottom line.As a result,com

16、panies are once again posting positive earnings,which has been a major concern of investors over the years.As trends continue to improve,we believe that investors will gravitate back toward these stocks,enabling their valuations to rise.Valuation Analysis The news from the wireless industry has been favorable over the past several months with industry growth rates returning and many of the semiconductor companies re-iterating guidance(RFMD,TQNT).However,there appears to be a negative undertone(O