Smartphone Sell-Through Seen as Modest Positive for Semiconductors, Says Pacific Crest (AAPL) (ARMH) (SWKS) (NXPI)

A monthly survey by Pacific Crest showed that initial demand for Samsung's Galaxy S6 and S6 Edge was better than feared. The survey also showed Apple (NASDAQ: AAPL) iPhone demand remains robust.

In the view of analyst John Vinh, results are a modest positive for mobility semiconductors, including ARM Holdings plc (NASDAQ: ARMH), Avago Tech (NASDAQ: AVGO), Maxim Integrated Products (NASDAQ: MXIM), NXP Semiconductors (NASDAQ: NXPI), Qorvo (NASDAQ: QRVO), and Skyworks Solutions (NASDAQ: SWKS).

"Based on our carrier conversations, we believe initial demand for Samsung's latest Galaxy flagship has been healthy since its launch on April 10. Additionally, while the regular GS6 saw higher demand, we noted that demand for GS6 Edge was better than expected, with multiple stores indicating stock-outs for the GS6 Edge, which were partially due to supply constraint of curved displays," said Vinh.

"In addition to healthy sell-through, we are more encouraged to see the lean inventory levels for the GS6, which is much lower than they were for the GS5 last year, suggesting a more measured ramp and minimizing risk of a potential inventory correction. We estimate GS6/Edge shipment to be 45 million units this year, up from 37 million for the GS5 last year," continued the analyst.

On Apple, Vinh said, "Our handset checks indicate continued healthy demand trends for both the iPhone 6 and 6 Plus, with inventories remaining extremely lean due to controlled supply. As iPhone demand has been able to hold up for the past few months, we believe it will track better than seasonal in Q2. PCS Apple analyst Andy Hargreaves estimates iPhone shipments at 47 million for Q2."

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