mk_j p 摩根-美股-半導(dǎo)體行業(yè)-美國半導(dǎo)體行業(yè)2019年展望-2018 12 21-26頁更多財經(jīng)內(nèi)容關(guān)注微信zhishikezhan朋友圈

1、North America Equity Research21 December 2018Semiconductors2019 Outlook: Market Discounting 2019 Cuts - Limited Downside from Here; Sustainable Move Higher 1H19; Top Pick AVGOOverall semiconductor industry revenue growth is on pace to achieve 14% Y/Y growth in 2018 or 8% ex. memory on positive deman

2、d trends during the year such as data center (compute, networking, memory, optical), automotive and industrial. The US-China trade-related slowdown (i.e. manufacturing/whitegoods production slowdown in China) combined with poor iPhone sales and auto production volatility kicked off a demand-driven c

3、orrection reflected in the recent October earnings season where 50% of our companies missed consensus expectations on the forward guidance. The average semiconductor stock in our universe is down 26% from the peak in June (down 11% YTD) and similar to the prior three down-cycles (average peak/trough

4、 decline was 30%). We believe further downside is limited and similar to past cycles, and, though we model sub-seasonal demand trends through 3Q19, we believe the stocks should start to discount improving fundamentals in 1H19 (after the first two rounds of number cuts). Despite weakness in industria

5、l/automotive/smartphones (we anticipate improving fundamentals in 2H19), we expect cloud data center spending toSemiconductors,Semiconductor Cap Equipment & Tech HardwareHarlan Sur AC(1-415) 315-6700Bloomberg JPMA SUR Bill Peterson AC(1-415) 315-6766Ant

6、hony Yu(1-415) 315-6753Andrew Nguyen(1-415) 315-5611J.P. Morgan Securities LLCrematrong, growing at strong double digits % in 2019 and over the next few years(DellOro estimates top 4 CSPs growing cloud capex 15-20% Y/Y in 2019). We also expect growth in

7、 communications infrastructure (late 4G/early 5G, long haul/metro wired networks) that has started to inflect positively in 2H18. Client PC (better than expected in 2018) will likely be stable/flattish and we anticipate continued strength inconsumer gaming/IoT.ummary, barring a comprehensive trade w

8、ar scenario(which we believe is unlikely) or global recession, we expect semiconductor revenuesto grow by low/mid-single-digit % in 2019 (ex-memory). Given what we view as thelimited downsidetocks and still positive demand trends in areas such as cloud datacenter, PC compute and consumer, we would s

9、tart accumulating on any further pull-backs in the group. In large cap stocks, we focus on market leaders with strong margin/free cash flow expansion potential and exposure to growth areas such as clouddata center, hyperscale, AI/ML and automotive sectors, whileMid cap stocks, wefocus on market lead

10、ers with strong product cycles and outsized top-line growth and margin expansion. We continue to hold our long-term view of stable growth in the semi sector (less cyclicality) as value migration continues shifting away from boxmakers and more to the silicon providers. Our large cap top pick is OW-ra

11、ted AVGO and we also favor OW-rated NVDA, INTC and MU, while our small cap top picksinclude OW-rated IPHI and MLNX.emicaps, we favor OW-rated LRCX.Long-term view of stable semi growth intact we continue to focus on market leaders with margin/free cash flow expansion potential (large caps) and strong

12、 product cycles (small caps). JPMs global economic team estimates global GDP growth of 3% in 2019 (2.0% in developed markets and 4.5% in emerging markets). Given the diversity of semiconductor demand drivers and our view of the industry becoming a more stable and less cyclical (characterized by mid-

13、single-digit% annual revenue growth and high-single-digit % unit growth on average), we believe the sector has become more of a stock pickers market. In large cap, we believe the market will reward companies with strong market leadership, scale andmargin/FCF expansion potential.Mid cap, we favor com

14、panies with marketleadership positions and strong product cycles. We broadly favor companies with outsized hyperscale, cloud data center, AI/ML, AV/ADAS and gaming exposure.See page 23 for analyst certification and important disclosures.J.P. Morgan does and seeks to do business with companies covere

15、d in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment 每日免費獲取報告1、每日微信群內(nèi)分

16、享5+最新重磅報告；2、每日分享當日華爾街日報、3、每周分享經(jīng)濟學人4、每月匯總500+份當月重磅報告（增值服務(wù)）；掃一掃二維碼關(guān)注公號回復(fù)：研究報告加入“起點財經(jīng)”微信群。North America Equity Research21 December 2018Harlan Sur(1-415) 315-6700Supply/demand environment appears relatively stable and expect more normalized industry revenue growth (3-5% ex-memory)

17、in 2019. We expect demand trends exiting 2018 and into 2019 to reflect sub-seasonal trends (Q/Q) returning to a more normalized trajectory in 2H19, following strong Y/Y performance for most of 2018. Supply-side fundamentals (channel inventories and lead times) remain disciplined and within the compa

18、ny target ranges (with few exceptions), based on 3Q earnings commentary and we believe the industry is shipping below consumption. Moreover, capital intensity (capex as % of revenue)remabelow historical levels when downturns occurred. Taking everything intoconsideration, we maintain our view of posi

19、tive Y/Y growth trends continuing into 2019, and expect Y/Y growth in the range of 3-5%.Investors and management teams closely following unpredictable US-Chinatrade dispute for clues of a resolution, leaving opportunitiestocks. Since thebeginning of trade escalations, we believe investors have taken

20、 a stance of fearingthe worst, which has been reflectedtocks. Semiconductors are very sensitive tothe macroeconomic and geopolitical landscape given the highly international natureof the technology value cha . That said, it should come as no surprise that this years escalation of geopolitical tensio

21、ns, especially between the US and China, have contributed materially to the underperformance of the SOX versus SPX, in our view. All Chinese goods imported into the US were on the brink of a 25% tariff at the start of 2019 before the G-20 Summit, where President Trump and Xi agreed on a 90-day truce

22、 to open discussions on relieving trade tensions. While we do not have a clear read on how trade discussions will evolve, we strongly believe tensions will not escalate beyond current levels as there will be significant demand/economic/strategic roadmap destruction on both sides.We continue to be po

23、sitively biased on the cloud data center end-market in 2019. The data center end market continues to exhibit strong growth driven by a technology upgrade cycle and increased capex spend on data center build-outs.Large hyperscalers such as Google, Amazon, IBM, Tencent and Alibabaare expanding their i

24、nfrastructure and cloud offerings, leading to accelerated deployments of next-generation data center servers, switches/routers andinterconnects (optical). While Y/Y comps appear tough, particularly in 1H19 for storage, we estimate capex from the top 7 cloud service providers (CSPs) to increase by mi

25、d-to-high teens % in 2019, after a robust 55% in 2018, benefitting providers of compute, storage, networking and optical. We expect significant uptake of Intels Cascade Lake platform in 2019 and AMDs Rome platform to ramp in 2H19. AI/Deep Learning investments should continue growing strongly in 2019

26、. In data center networking, we believe the 50Gbps switch port upgrade (PAM 4 modulation)is already ramping and represents a strong upgrade cycle that support 50Gb, 200Gb and 400Gb/sec speeds.witch and optical portsEarly deployments of 5G to begin picking up momentum in 2019, especially in infrastru

27、cture. Another growth vector attracting investor attention is 5G infrastructure deployment. While most companies acknowledge the substantial deployment of infrastructure is a 2020+ event, many are benefitting from early deployments today, primarily in backhaul RF, access and interconnect suppliers.

28、Early applications are geared towards radio, massive MIMO, cable and radar in geographies primarily in Korea, China and North America. These early deploymentsare contributing to meaningful revenue ahead of expectations,ome cases 2-3quarters ahead. While we see limited 5G adoption in handsets in 2019

29、, as we lookahead, we maintain our expectation of the current market leaders Qorvo, Broadcom and Skyworks Solutions remaining market leaders in handsets in the 5G era.2North America Equity Research21 December 2018Harlan Sur(1-415) 315-6700Consolidation momentum slowed in 2018 l

30、argely on macro/geopoliticaluncertainty, though remaa key driver for semi stocks/valuations ascompanies continue to seek diversification, scale and earnings/free cash flow expansion. Although 2018 deal activity decelerated Y/Y, we continue to believe theconsolidation waveemis is structural over the

31、long term and expect it to reboundonce macro/geopolitical uncertainty is flushed out. As such, we still see M&A providing valuation support for semi stocks going forward. Aga t a backdrop of lower growth and cyclicality, more industry players are looking into M&A as aneffective way to increase marke

32、t diversification, extend market leadership positions and/or drive higher profitability (both earnings and FCF). As companies continue to voice their willingness to engage in M&A and consolidators continue to report good progress (with integration), we believe the consolidation wave will likely cont

33、inue, which, should provide valuation support for already depressed semi stocks.Selloff overdone and leaving valuations very supportive as we look into 2019. At recent levels, the SOX index is trading at a modest 11x next years consensus earnings, versus 14x for the S&P 500 as the Street has consist

34、ently priced in more severe scenarios for the chip space amidst macro/geopolitical uncertainty. We believe that valuations for semi stocks look very attractive heading into 2019 and that investors may begin discounting more positive 2H19 earnings after the January earnings season. We see the possibi

35、lity of another round of estimate cuts following next earnings season, which could signal a bottom as we have seen in past downcycles. Bottom line, we strongly believe the selloff would look to add key names in 2019.emi stocks is overdone andWe believe 2019 will be a stock pickers year and recommend

36、 investors focus on select stocks with strong market leadership, margin/free cash flow expansion potential (large cap), and strong product cycles (small cap). Our large cap top pick is OW AVGO and we also favor OW-rated NVDA, INTC and MU while our small-cap top picks include IPHI and MLNX. Our top p

37、icks are levered to end-markets and secular themes we highlight (i.e. hyperscalers, AI/ML,cloud datacenters, AV/ADAS, gaming).emicaps, we favor OW-rated LRCX.3North America Equity Research21 December 2018Harlan Sur(1-415) 315-6700Table of Contents2018 Wrap and Where We Are Now5

38、Strong Revenue Growth Led By Solid Trends in Data Center, Automotive and Industrial Markets5Semiconductor Revenues to Increase by 14% in 2018 and Grow By 3-5% Ex- Memory in 20196Similar correction cycle to what was seen in 20156Cycle Analysis Suggests Bottom Could Form After C4Q18 Earnings Seasonemi

39、Stocks and Sentiment7Long-Term Stable Growth Outlook Intact10Demand Trends Remain Healthy in 2019, Particularly Accelerating in the 2H11PAM4 networking in data centers: Key technology behind upcoming 50GbEspecifications that minimizes power and cost overhead.upgrade already underway and to ramp thro

40、ugh 201913Supply-side Cyclical Indicators Still Intact as Semi Channel Inventory RemaWithin Normal Ranges15Margin Expansion Remaa Key Driver of Outperformance15Dividends/Share Repurchases Provide Downside Support16Consolidation in the Semi Industry Likely to Resume16Investors Intently Focused on US-

41、China Trade Implications, But as Time Goes By, We Expect Focus to Return to the Fundamentals, Which Are Still Positive19Large Cap Top Picks Heading into 201919Broadcom (AVGO OW)19NVIDIA (NVDA OW)19Intel (INTC OW)20Micron (MU OW)20Small Cap Top Picks Heading into 201920Inphi (IPHI OW)20Mellanox (MLNX

42、 OW)21Appendix: Valuation and Comp Table224North America Equity Research21 December 2018Harlan Sur(1-415) 315-67002018 Wrap and Where We Are NowStrong Revenue Growth Led By Solid Trends in Data Center, Automotive and Industrial MarketsWe believe the industry is on pace to see r

43、evenue growth in 2018 in the double-digits% following strong 22% Y/Y growth in 2017. Revenue growth in 2018 was again driven by solid Y/Y growth in data center and industrial/automotive end-markets especially in the first half of 2018, on continued momentum in content ga.Although we forecast industr

44、y fundamentals (supply/demand) sub-seasonal through 3Q19, we believe the stocks should start to discount improving fundamentals in 1H19 (after the first two rounds of number cuts). Despite weakness in industrial/automotive/smartphones (we anticipate improving fundamentals in 2H19),we expect cloud da

45、ta center spending to rematrong, growing at a strong double-digit % CAGR in 2019 and over of the next few years (DellOro estimates top 4 CSPs growing cloud capex 15-20% Y/Y in 2019). Semiconductor stocks areunderperforming broader markets in 2018 with the SOX index down 11% YTD following 38% appreci

46、ation in 2017. The Nasdaq is down 5% YTD and the S&P500 is down 8% YTD following appreciation in 2017 of +28% and +19%, respectively.Historical SIA industry data show that the semi industry shipped below seasonal trends in 2015 and through the 1H16. The industry then recovered, showing better than o

47、r at seasonal averages starting 2H16 through 1H18. For the first time since 2Q16, the semi industry shipped units below historical averages in 3Q18.Table 1: Industry Q/Q Growth Below Historical Trends For First Time Since 2Q16 in 3Q183Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q

48、187%0%-2%2%6%-1%-3%2%7%0%-3%3%7%0%-2%3%7%7%0%-5%1%1%-2%-5%1%12%5%0%5%11%6%-2%6%4%Source: WSTS Bluebook.5Quarter10-year Avg. Q/Q GrowthActualNorth America Equity Research21 December 2018Harlan Sur(1-415) 315-6700Semiconductor Revenues to Increase by 14% in 2018 and Grow By 3-5%

49、Ex-Memory in 2019As illustrated below, we expect total semiconductor industry sales to grow 14% Y/Y and 8% ex-memory in 2018. We expect units (ex-discretes) to grow by approximately the same rate Y/Y, while ASPs are approximately flat Y/Y. We believe 2H19 reacceleration of robust data center cloud c

50、apex will drive semi ex- memory revenue growth +3-5% in 2019 (albeit -2% Y/Y including memory), which compares to JPMs 2019 global GDP growth estimate of 3%.Table 2: Y/Y Change%, $ billionsemiconductor Units, ASP, and Revenue199219931994199519961997199819992000200120022003200420052006200720082009201

51、020112012201320142015201620172018E2019E-3%12%10%21%2%24%2%18%26%-20%13%17%20%12%20%13%6%1%21%5%7%7%10%9%5%14%14%2%15%17%21%18%-11%-16%-10%1%9%-16%-10%2%7%-4%-9%-9%-8%-10%9%-5%-8%-1%0%-8%-4%7%0%-4%10%29%32%42%-9%4%-9%19%37%-32%1%18%28%7%9%3%-3%-9%32%0%-3%5%10%0%1%22%14%-2%$59.9$77.3$101.9$144.4$132.0

52、$137.2$125.5$149.4$204.4$139.0$140.7$166.4$213.0$227.5$247.7$255.6$248.6$226.3$298.3$299.5$291.6$306.0$335.8$335.0$338.9$411.9$470.1$462.5Source: SIA and J.P. Morgan estimates. Unit growth and ASP growth exclude discrete components.Similar correction cycle to what was seen in 2015China/US trade rela

53、ted slowdown (ie manufacturing/whitegoods production slowdown in China) combined with poor iPhone sales and auto production volatility kicked off a demand-driven correction reflected in the recent October earnings season where 50% of our companies missed consensus expectations on the forward guidanc

54、e, similar to what we experienced in 2015 when 50% of our companies missed consensus on the out-quarter outlook as well. The average semiconductor stock in our universe is down 26% from the peak in June (down 11% YTD) and similar to the prior three down-cycles (average peak/trough decline was 30%).

55、We believe further downside is limited and similar to past cycles, even though we model sub-seasonal demand trends through 3Q19, we believe the stocks should start to discount improving fundamentals in 1H19 (after the first two rounds of number cuts).6Unit GrowthASP GrowthRevenue GrowthRevenueNorth

56、America Equity Research21 December 2018Harlan Sur(1-415) 315-6700Figure 1: Semiconductor Coverage Universe Revenue Results and Guidance vs. Consensus 1Q15A Actual to 4Q18 Guidance% of total coverage100%90%80%70%60%50%40%30%20%10%0%000000000000 11111334443065566766387869811111091140101121521035 1103291081131524214122131199