Source: Company data, Credit Suisse estimates CS Asian Tech Conference (ATC) takeaways. The 22nd annual Credit Suisse Asian Technology Conference was held virtually again featuring 124 corporates and 8 expert speakers, 816 investors and 3,600 meetings from 6-10 September. The company tone stayed at the top end of the 15-year history with 73% of companies’ positive and 27% neutral as managements stayed positive on tech drivers continuing to keep supply tight.

Demand optimism continues, supply remained constrained. Management teams expect demand to stay healthy in 2022 from HPC/cloud, EV, IoT (Wifi 6, AR/VR, wearables) and hybrid office. IC tightness is supporting rising pricing for foundry, back-end, and substrates, with most fabless expecting to pass on though hardware, assembly and components are facing bottlenecks and cost pressures. Risk would be a decline of PC/Consumer and inventory correction, though the supply chain desire to carry buffer stock amid moderate supply growth should keep capacity tight through most of 2022.

Optimism on tech drivers continuing. Key takeaways driving sentiment: 1) IC tightness continuing to lift pricing, 2) HPC/Data center strength continues, with optimism on AMD/Intel 2022 refreshes, 3) Android smartphones mixed but 5G upgrades on track, 4) iPhone ramps on time, Mac/iPad still growing, 5) PC expected to keep stable into 2022 but shifting from Chromebooks, 6) IoT growth/upgrades continue for Wifi, PON, Wearables and AR/VR, 7) auto electronics strong but still constrained, 8) memory resilient vs. facing a downturn, 9) foundry capacity tight with TSMC price hikes widely confirmed, 10) back-end drivers from wirebonding, SiP and IDM sourcing, 11) supply chain inventories in control but seeking to build more buffer, 12) China semiconductors continuing its growth.

Stock picks from ATC. Top semis picks are TSMC (price increases affirmed), Samsung (memory resilient, mobile recovery/foldables), Mediatek (5G flagship launch, non-mobile content), GlobalWafers (rising wafer pricing), Novatek (OLED gains, tightness continuing), Will Semi (Non Smartphone Ramps), Giga Device (MCU/NOR ramps), Unimicron (ABF tightness), Semco (strong substrates, resilient MLCCs) and JEOL (EUV mask writers). For hardware, top picks are Lenovo (improving data center, commercial PC), E-Ink (rising ESL), Hulane (automotive connectors), LG Innotek (iPhone camera module upgrades), ZTE (Infrastructure share gains/Improving GMs) and Xiaomi (mobile and IoT share gains).