Ping An Securities: Apple SE4 is expected to be released in March next year, and the supply chain will not be dull in Q1 2025

According to Zhitong Finance APP, Ping An Securities released a research report stating that Apple's (AAPL.US) SE4 is expected to be launched in March next year. The core beneficiary companies in the Apple supply chain are expected to see high growth in Q1 2025. NVIDIA (NVDA.US) GB200 server industry chain PCB-related manufacturers have received large orders and are ramping up production, with performance expected to see high growth in the fourth quarter and the first quarter of next year. AI edge applications are accelerating, likely bringing innovation and new opportunities to hardware products such as smart glasses, TWS headphones, wearables, and mobile phones/PCs. We remain optimistic about AI-driven, Apple supply chain, and self-controllable beneficiary industry chains.

Key Views from Ping An Securities:

Apple SE4 is expected to be launched in March next year, and the Apple supply chain is not weak in Q1.

Apple is expected to launch the SE4 model in March 2025, introducing a full-screen and OLED display for the first time in the iPhone SE series, with a body size of 6.1 inches, similar to the iPhone 16. It will use the A18 Bionic chip and will be the first to feature Apple's self-developed 5G modem, upgrading to a 48-megapixel rear camera. It is predicted that the Apple supply chain will see positive inventory pull-in in Q1, with performance expected to grow significantly.

In Q1 2025, the Apple edge model will also undergo a major upgrade, with Apple Intelligence features gradually opening up globally. The hardware innovations and supply chain shares for the iPhone 17 will also be gradually determined. The iPhone 17 is expected to see upgrades and value enhancements in areas such as SOC chip AI capabilities, heat dissipation, FPC soft boards, batteries, and back covers. The valuations of leading companies in the Apple supply chain are reasonable, and the trends for innovation and sales growth in Apple hardware/edge models are confirmed for 2025-2026. Apple is expected to launch foldable phones/pads and smart glasses in 2026, continuously building its core competitiveness in chip, system, hardware innovation, and edge AI models.

According to industry chain research, the demand for NVIDIA's GB200 servers is strong, and PCB-related manufacturers in the industry chain have received large orders and are ramping up production, with performance expected to see high growth in the fourth quarter and the first quarter of next year. It is recommended to focus on core beneficiary manufacturers.

Ping An Securities believes that the demand for AI cloud computing power remains strong, and AI edge applications are accelerating, likely bringing innovation and new opportunities to hardware products such as smart glasses, TWS headphones, wearables, and mobile phones/PCs. Recently, multiple manufacturers have released smart glasses, and smart glasses are expected to see rapid development in 2025. With continuous technological breakthroughs, significant growth is expected in 2026. We continue to be optimistic about AI-driven, Apple supply chain, and self-controllable industry chains.

Segmented Tracks

Semiconductor Foundry: Global CoWoS capacity demand is expected to grow by 113% next year, with TSMC's monthly capacity increasing to 65,000 wafers.

Industrial, automotive, security, consumer electronics: According to Canalys, global PC shipments are expected to reach 66.4 million units in Q3 2024, a year-on-year increase of 1%, with AI PC sales expected to reach 50 million units in 2024. Global smartphone shipments are expected to increase by 5% year-on-year in Q3 2024, with an expected AI smartphone penetration rate of 16% in 2024. Global smart audio shipments are expected to reach 110 million units in Q2 2024, a year-on-year increase of 11%. Demand for consumer electronics continues to recover On September 9, Apple released the iPhone 16 series, all equipped with the A18 chip, and the Apple Intelligence system is gradually being upgraded, which will help drive a new wave of replacement cycles. According to the China Passenger Car Association, it is expected that the sales of new energy passenger vehicles in November will reach 1.28 million units, with a penetration rate of 53%. It is projected that the sales of new energy passenger vehicles in 2024 will be 11 million units, a year-on-year increase of 22%, with a penetration rate of 40%.

PCB: From the latest data in October regarding the PCB industry chain, the overall industry has shown a slowdown in prosperity, with both upstream and downstream growth rates declining month-on-month. According to traditional seasonal distribution, Q3 should be a peak season, while Q2, being a low season, should have a higher prosperity level. Currently, the entire Q3 peak season is showing signs of pressure on prosperity. Based on our tracking of the industry chain, the main reason comes from the slowdown in demand growth for home appliances and consumer goods, leading to rising inventory levels. The entire industry entered a slow adjustment phase in Q3, which is expected to continue into Q4. We believe that further tracking is needed to assess subsequent changes.

Components: From the cyclical perspective of passive components, performance dimension: performance continued to improve in 2023, with a quarter-on-quarter increase in the first half of 2024.

IC Design: Major memory manufacturers are shifting to DDR5/HBM, and niche memory manufacturers in the A-share market are welcoming development opportunities. As mainstream memory prices continue to rise, the three major manufacturers are continuously digesting inventory. After capital recovery, they will focus on areas with strong future demand, such as DDR5 and HBM, accelerating their exit from the niche memory market.

Risk Warning

Risks of demand recovery falling short of expectations; risks of AIGC progress not meeting expectations; risks of further escalation of external sanctions