Gamingdeputy reported on September 26 that Tianfeng Securities analyst Ming-Chi Kuo recently released a market research briefing again.I think Apple will launch it next year iPhone 16 Pro and iPhone 16 Pro Max two models will use iPhone 15 Pro Quad prism lens on the Max.
Ming-Chi Kuo analyzed in an analysis briefing iPhone 15 The supply chain situation of Pro Max mentioned that due to Apple’s increased verification requirements for telephoto lenses and higher market demand, the price has increased.
As specifications improve and demand increases, the cost of the component will rise approximately 30%, to $6 to $6.50 per unit.
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Ming-Chi Kuo predicts that iPhone shipments with quad prism cameras will grow by about 110% in 2024, equivalent to 70 million to 80 million units.
High demand should mean that current lens suppliers Largan Optoelectronics, Crystal Optoelectronics, and Lant Optical will be the main beneficiaries of Apple’s prism promotion in 2024.
Gamingdeputy hereby attaches the original text of the report as follows:
in conclusion
The strong shipment momentum of Largan Optoelectronics, Crystal Optoelectronics and Lant Optical is expected to be maintained until the end of the year (vs. the general Apple supply chain shipment peak is in October), because Apple urgently increases the verification of the iPhone 15 Pro Max telephoto lens before shipment. standard and the demand for this model after its release was better than expected.
In Largan’s 2H23 revenue (mainly 4Q23), the iPhone 15 Pro Max telephoto lens contributed approximately NT$6.5-7 billion due to price increases, which was significantly higher than the NT$1.5-2 billion of the 14 Pro Max last year.
Crystal Optoelectronics (primary supply) and Lant Optical (second supply) have benefited from the significant growth in orders from Largan Optoelectronics, so their capacity utilization rates are expected to be fully loaded until the end of the year, and both will continue to expand production by at least 50% in 2024.
LGIT’s current module yield problem is detrimental to recent profits, but due to improved technical capabilities next year, it may be the sole supplier or the main supplier of iPhone 16 Pro quadruple reflective telephoto modules.
This change may not be good for Yujingguang (lens) and Cowell Electronics (module) to obtain orders for the quadruple reflex telephoto lens for next year’s iPhone 16 Pro series. The key lies in the improvement of lens verification standards and the difficulty of module assembly, which is higher than expected. Close attention is needed. Observe the verification results of these two suppliers before April next year.
Industrial background
Demand for the iPhone 16 Pro Max is higher than expected, with the key selling point being the telephoto camera equipped with quad-reflective camera technology.
In order to improve module yield, Apple urgently increased the lens specifications, hoping to compensate for module assembly tolerances through more precise lens assembly (1G3P lens + lens).
As Apple urgently improves lens specifications and requires expansion of production, the unit price of the iPhone 16 Pro Max telephoto lens has increased by approximately 30% to US$6–6.5 (US dollars).
Both iPhone 16 Pro Max and iPhone 16 Pro are expected to be equipped with quad-reflective telephoto cameras, and may maintain the current high specifications to ensure camera performance and production yields. I predict that iPhone shipments equipped with quad-reflective telephoto cameras will grow by about 110% YoY to 70-80 million units in 2024.
Largan’s 4Q23 revenue and profit are expected to beat market expectations, and will continue to benefit significantly in 2024
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Largan Light is the exclusive supplier of telephoto lenses for iPhone 14 & 15 Pro Max.
iPhone 14 Pro Max In 2H22, telephoto lenses shipped approximately 30 million units, with a unit price of US$1.5–2. The iPhone 15 Pro Max telephoto lens shipped approximately 35 million units in 2H23, and the unit price increased by approximately 30% to US$6–6.5 due to improved specifications.
Therefore, based on the Pro Max telephoto lens alone, Largan’s 2H23 revenue increased by NT$5.0-5.5 billion compared with 2H22 (mainly concentrated in 4Q23). If it is assumed that Largan’s other revenue does not change much, 4Q23 revenue is expected to have significant YoY growth, beating market expectations.
iPhone 15 Pro Max is the most important driver of Apple’s 4Q23 revenue and profits, so Apple agreed to significantly increase the unit price of telephoto lenses by 30% in exchange for and ensuring Largan’s support.
Crystal Optoelectronics and Lante Optical’s production capacity utilization will be fully loaded until the end of the year, and both will significantly expand production in 2024
Before Apple improved the specifications of the iPhone 15 Pro Max telephoto lens, Crystal Optoelectronics was almost the exclusive supplier, and Xihan’s monthly production capacity utilization rate in 2H23 averaged over 70%. After increasing the lens specifications, Largan’s demand for lenses increased significantly, causing Crystal Optoelectronics’ production capacity utilization to be unable to meet order demand even if it was fully loaded, so Lant Optical’s orders also increased significantly.
Crystal Optoelectronics is the first supplier of Yihan, accounting for about 70-80% of the total supply.
In response to Apple’s strong demand for products in 2024, Crystal Optoelectronics and Lant Optical both expect to expand production capacity by at least 50% in 2024. The supply proportions of Crystal Optoelectronics and Lant Optical remain at about 70-80% and 20-30% respectively.
Key supplier orders/growth trend analysis
Largan, Crystal Optoelectronics and Lant Optical will remain the biggest beneficiaries of Apple’s active promotion of quadruple reflective imaging technology in 2024 due to their high order visibility.
like Android Brands have begun to follow Apple and actively promote periscope cameras. Potential beneficiaries are Largan and Crystal Optoelectronics.
LGIT’s recent profits have been worried due to module yield issues, but it should be significantly improved before the iPhone 16 Pro is mass-produced.
We have a neutral view on Jahwa as VCM shipments and unit prices are almost unchanged.
As the specifications of the quadruple reflection telephoto lens have been improved and module assembly is more difficult than expected, it is unfavorable for Yujingguang (lens) and Gaowei Electronics (module) to become new suppliers in 2024. Close observation is required before April next year. Verification results from these two vendors. From Apple’s perspective, one would hope that Yujingguang and Gaowei Electronics can become new suppliers. However, the technical gap between suppliers can sometimes not be made up for by Apple’s support in the short term. The results of BOE’s iPhone panel shipments this year are low. Expectation is the best proof.
Related Reading:
“Ming-Chi Kuo: Apple iPhone 15 Pro Max’s 5x optical zoom lens will be expanded to iPhone 16 Pro”