RBC estimated that Samsung Galaxy S4 sales will total 80 million units by the end of 2013. Citing channel checks that suggested demand in the U.S. was solid, the assessment is a buying opportunity for investors interested in the smart phone supply chain. Sorted by the price to sales ratio, there are some of the suppliers that would benefit from higher S4 sales.
Chances are good that S4 sales could reach 100 million units in lifetime sales. Samsung is also releasing a Galaxy S4 mini, which sports a small 4.3-inch display. A Galaxy S4 Zoom is also rumored to have a camera with a 10x optical zoom lens. The rear camera will be 16-megapixels. The device will have a 1.6 GHz dual-core processor powered by Qualcomm (QCOM), a microSD slot, and 8GB of memory. Similar to waterproof Sony (SNE) Xperia smartphones, Samsung is also reportedly releasing a Galaxy S4 Active. The device will be water and dust resistant, and will have a 5-inch screen.
1. Synaptics Inc. (SYNA, Earnings, Analysts, Financials): Develops and supplies custom-designed human interface solutions that enable people to interact with various mobile computing, communications, entertainment, and other electronic devices. Market cap at $1.34B, most recent closing price at $41.27.
If an announcement of the Active and Zoom Samsung phones are true, then the suppliers could rally ahead of the event. Synaptics (SYNA), whose shares are off 9% from its 52-week high, could move up again. The company makes the touchscreen for Samsung. It gave a strong forecast after winning the S4 contract.
2. Universal Display Corp. (PANL, Earnings, Analysts, Financials): Engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in flat panel display, solid-state lighting, and other product applications. Market cap at $1.33B, most recent closing price at $28.78.
Universal Display makes materials used for the OLED component of the Galaxy S4. The company has a multi-year OLED supply contract with Samsung.
3. TriQuint Semiconductor, Inc. (TQNT, Earnings, Analysts, Financials): TriQuint Semiconductor, Inc. supplies modules, components, and foundry services to communications companies worldwide. Market cap at $1.17B, most recent closing price at $7.17.
TriQuint Semi, which makes radio-frequency (or RF) solutions, is up 46% so far in 2013. The company also operates in the transport segment, where it is growing at 9% a year. The company makes 40G and 100G optical drivers for this market. The company forecasts revenue of $187.5 million in the current quarter, and a loss of $0.11 per share.
4. Atmel Corporation (ATML, Earnings, Analysts, Financials): Designs, develops, manufactures, and markets a range of semiconductor integrated circuit (IC) products. Market cap at $3.4B, most recent closing price at $7.94.
Atmel Corporation, whose shares are at a 52-week high, makes the low-power sensor hub for the Galaxy S4.
5. Skyworks Solutions Inc. (SWKS, Earnings, Analysts, Financials): Skyworks Solutions, Inc., together with its subsidiaries, offers analog and mixed signal semiconductors worldwide. Market cap at $4.51B, most recent closing price at $23.57.
Skyworks Solutions Inc., whose shares are range-bound between $20 and $24, reported a rise in revenue last quarter. The company makes 3G, switching, and WLAN solutions. It also makes GSM and SPRS products. Skyworks Solutions reported a net revenue of $425.2 million, up 16.6% for the quarter ending March 29, 2013.
(List compiled by Chris Lau)
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