5G, iPhone evolution and positive EV trends are the growth drivers for the Asian technology sector, according to financial service providers Credit Suisse.
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"The longer-term technology story remains robust and will be driven by growth themes involving the 5G rollout, iPhone evolution, AI-supported cloud computing developments as well as the EV megatrend," said Manish Nigam, Head of Global Sector Research and Head of Asia Pacific (APAC) Technology Research at Credit Suisse.
The global investment bank expects 5G rollout to ramp up and smartphone usage to rise as people venture out more from their homes.
It estimates shipments of smartphone units to grow to 707 million in 2022 from 551 million in 2021 where 5G-enabled smartphones will account for 50% of all units.
5G-enabled smartphone shipments rose to 20% of total units in 2020, with a faster pickup than 4G smartphone penetration, the bank noted.
Also Read | ‘India to have 330 mn 5G connections by 2026’
It has maintained a stable 2021 forecast for smartphones, with 5G and iPhones tracking better than expected year-to-date.
“We remain bullish on 5G as a catalyst for iPhone upgrades," said Randy Abrams, Head of Taiwan Securities Research and Asia Semiconductor Analyst.
Credit Suisse expects Apple iPhone evolution to drive sustained opportunities. The bank estimates iPhone shipments at 234 million units in 2021, growing 15% from the last year.
It believes that upgrades to the iPhone, possible foldable model in 2023, moving face ID and fingerprint function underneath the glass, larger screen size for iPhone SE, and 5G support to drive further growth in sales, creating supply chain opportunities.
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The Switzerland-based bank also sees a positive EV trend to aide the automotive industry. This could in turn could support the semiconductor demand.
Credit Suisse estimates hybrid-electric (xEV) car units to rise to 63 million by 2030, growing by over six-fold from eight million in 2020.
With the rising xEV adoption rates, the average semiconductor content per car is forecasted to more than double to $1,100 in 2030 from around $510 in 2020.
The investment bank believes that with the automotive semiconductor market spending being bolstered by the EV megatrend, industry revenues are set to grow to $110 billion at an annual growth rate of 11% over the next decade.
