[Click eStock] iPhone Supercycle... Stock Revaluation of LG Display, LG Innotek, and Others

[Asia Economy Reporter Lee Seon-ae] KB Securities predicted that the stock prices of related domestic companies will be re-evaluated following the super cycle of the iPhone.

According to KB Securities on the 15th, the initial production volume of the iPhone 13 appears to have expanded to around 90 million units. Earlier, Bloomberg reported that Apple raised the initial production volume of the iPhone 13, to be released in September this year, to 90 million units, a 20% increase compared to previous estimates. This is interpreted as reflecting Apple’s confidence in sales in North America and Europe, where consumer sentiment is expected to recover after COVID-19 vaccinations, by strengthening the iPhone 13 hardware features (camera, display) while maintaining a price policy similar to the previous model.

The order volume for iPhone 13 OLED panels is estimated at 120 million units. Apple is expected to have increased the initial order volume of OLED panels for the iPhone 13 (120 million units) by 20% compared to before, with Samsung Display supplying 70 million units and LG Display supplying 50 million units. The iPhone 13 display has changed to an integrated touch type (Y-OCTA), enabling cost efficiency, and LTPO (Low-Temperature Polycrystalline Oxide) technology is applied for the first time, improving display quality and response speed (120Hz) while enabling low power consumption, which is expected to improve battery efficiency as well.

After the launch of the iPhone 11, it took about 9 months to reach initial sales of 100 million units, but the iPhone 12 reached 100 million units in 7 months. Although the iPhone 12’s sales benefited partly from the first release of a 5G model and the fallout from Huawei’s exit, it is also judged that the entry into the iPhone replacement cycle had a significant impact, which is expected to positively influence iPhone 13 sales going forward.

On the 14th (local time), Apple’s stock price rose 2.4% from the previous day to $149.2, approaching a market capitalization of 2,900 trillion KRW (2.5 trillion USD), setting a new high amid expectations of increased iPhone 13 sales. Apple is estimated to have ① an iPhone replacement cycle arrival (2020?2022), ② the release of XR (eXtended Reality) devices for the Metaverse in 2022, and ③ entry into the electric autonomous vehicle market with the launch of the Apple Car in 2024, securing a solid future growth roadmap, which is expected to lead to attempts to surpass a market capitalization of 3 trillion USD in the future.

KB Securities stated, "We also expect a re-evaluation of the stock prices of Samsung Electronics, SK Hynix, LG Display, LG Innotek, and others that lead the supply of key components for Apple’s future growth."