Samsung Electronics is now the top global semiconductor customer. In 2012, Samsung surpassed Apple (AAPL), as demand grew 8% to $23.9 billion, while Apple purchased $21.4 billion:
(Chart Source: Gartner)
Samsung and Apple are the clear winners, even though the data is backward looking. Apple shares dropped over 12% when the company reported a drop in profit margins. Despite the net decline (shares are down 30% in the quarter), Apple still makes a higher profit than Samsung from the sale of smartphones and tablets.
Sony (SNE) is also a surprising buying idea from this data. Demand from suppliers increased by 1.9% to $7.9 billion. This is a surprise, because few investors notice that the conglomerate released several, but fewer, Android-based smartphones in 2012. The designs were competitive: phones had bigger screens, were thinner, and the hardware was top notch. For 2013, Sony is releasing a water-proof Xperia Z model.
The weak PC sector in 2012 is well-known by investors and is priced in.
Dell (DELL) shares are trading so low that talk of the company being bought out lifted the stock by nearly 40%. Dell closed recently at $13.16. Demand for parts declined to $8.6 billion, or 13.4% in 2012.
Hewlett-Packard (HPQ) reduced demand from semiconductor suppliers by 12.7%. HP does not have a smartphone or tablet, and relies on sales of printers and PCs. Until HP designs something more unique, up-to-date, lighter, and of higher offering than tablets, the company could continue to trade a single-digit forward multiples. (See HP’s Price Of Profit (forward P/E) on Kapitall).
Nokia (NOK) appears to be a bearish idea. Demand for semiconductors declined by 42.6%, but this is expected. Nokia is winding down Symbian and ramping up sales for Lumia for 2013.
Interactive chart: Press play to see changes in average analyst ratings for the companies listed