TSM, SanDisk (SNDK) Warnings Are Not a Death Knell for Smartphones (AAPL) (QCOM) (SWKS) (AVGO) (more...)

Rosenblatt Securities analyst Jun Zhang said they don't believe that Taiwan Semi's (NYSE: TSM) and SanDisk’s (SNDK) forecast cuts are related to the overall smartphone industry.

They remain bullish on Apple (NASDAQ: AAPL), Samsung and China's 4G build in Q2, which will benefit Qualcomm (NASDAQ: QCOM), Skyworks (NASDAQ: SWKS), Avago (NASDAQ: AVGO), Synaptics (NASDAQ: SYNA), Semiconductor International (SIM) , and Micron (NASDAQ: MU).

Zhang said, "We think the reaction of investors to TSM's forecast cut is an awakening to previously well-known events: China 3G weakness, Samsung giving up on Qualcomm's solution, Qualcomm switching to other foundries, including SIM, as well as Apple's sequential order decline. Therefore, we think the current expectation of a 2% QoQ decline is too high."

He added, "We think SNDK's forecast reduction is not related to market demand. Instead, we believe their eMMC products face some technical issues that have been designed out of some tier 1 OEMs and replaced by Samsung and Toshiba. We think Silicon Motion (SIMO) will benefit from their market share switch."

The firm maintain their bearish view on Knowles Corp. (NYSE: KN), Himax (NASDAQ: HIMX) and AU Optronics (NYSE: AUO) due to weak 3G and slowing overall smartphone growth.

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