iPhone Capacitor Supplier Expects Increased Demand in 2020 Due to 5G

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A Japanese supplier of ceramic capacitors for smartphones expects 5G demand to pick up in 2020 in the Chinese market. Taiyo Yuden Co, the supplier in focus, provides components to Apple, along with Huawei and Samsung.

Like most other Apple suppliers, Taiyo Yuden's share price has more than doubled this year. 5G smartphones will require an increased number of capacitors, around 1,000, which is estimated to be 30% more than 4G smartphones, as per Bloomberg. Due to the power-hungry nature of 5G, companies seek smaller capacitors which can be densely packed in a tighter space inside smartphones.

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Shoichi Tosaka, Chief Executive Officer of Taiyo Yuden, claims that Huawei alone is expected to sell 100 million 5G-enabled smartphones in China in 2020. This is a lofty number but Huawei sold 185 million smartphones in the first 3 quarters of 2019, despite a sales ban in the United States.

Taiyo Yuden's factories are currently functioning at 85% capacity and are ready to meet the increased demand for 5G smartphones from Apple, Huawei, and Samsung. While Huawei and Samsung were first out of the gate with 5G smartphones, investors believe that Apple's introduction of 5G-capable smartphones will push the market forward.

As per Bloomberg:

If Apple Inc. introduces its first 5G-enabled models in September, as is widely expected, the orders for components are likely to come in June, Tosaka said. The company has sufficient output capacity to meet the demand, he said.

As per rumors, it is expected that Apple will launch three new 5G iPhone 12 models in 2020. Qualcomm will be supplying 5G modems to Apple for iPhone 12. All these iPhone models will also ship with OLED displays, as well as new designs inspired by iPhone 4. A14 Bionic chip, faster graphics performance and improved camera system with time-of-flight sensor are expected to be the other highlight features for iPhone 12.

Apple will launch another iPhone in 2020, in the form of iPhone SE 2. However, iPhone SE 2 (or iPhone 9) is not expected to ship with 5G as it will be a low-cost model.

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