Sunny Optical posted a decent comeback in handset lens production in April, up 35% MoM. The real action is expected to start in May when Sunny begins shipping 8 megapixel lenses to Samsung, and the street will be watching to see if it shows up in the numbers. Although the counter is pricey, now trading at parity to Largan, with its new orders from Samsung and exposure to emerging markets through the local Chinese brands, earnings have multiple years of continued high growth.… More

21Vianet reported 1Q13 results at the low end of expectations and gave guidance which was about in-line with expectations. Utilization is creeping up, and expected to break above 70% in 2Q13. However, with 8k new cabinets scheduled to come on line mainly in 2H13 the challenge will be to keep utilization from turning south again. With the partnership with Microsoft still nascent and utilization and margins likely to struggle with the massive capacity addition, the real earnings growth story for VNET will be in 2014. For those willing to wait, the share price offers a value.… More

Hon Hai reported disappointing 1Q13 results, with operating profits down 8.6% YoY to NT$13.9bn. Although its operating margin came in at 1.7%, up from 1.5% in 1Q12, it was well below the street which was looking for 2.3-2.5%. As a result, operating earnings came in 30% below consensus. Looking into 2H13, although some hold out hope that the mythical iPhone Mini could revive growth, the likelihood is it won't have much of a positive impact. The real winner in the iPhone Mini launch is Pegatron. … More

TSMC reported strong April revenue, up 13.5% MoM, and representing 32% of its 2Q13 guidance. Unless revenue is flat MoM in May and June, which is unlikely, TSMC is set to beat. The notebook makers are looking for 2Q13 shipments to be roughly flat QoQ, which after a horrible 1Q13 means they will be down steeply YoY. Although a touch screen shortage, Windows 8, and the launch of Haswell, are partially to blame, the bigger issue is that they are going the way of the Dodo bird.… More

Asustek reported 1Q13 results in-line with expectations but gave 2Q13 guidance which was slightly below. Although, its outperforming its peers the share price doesn't have any place to go. Mediatek reported a big bump in April sales in the run up to the May 1st holiday in China. Novatek's 1Q13 results were smack in-line with its guidance, although a little shy of the street. Although Novatek's 2Q13 guidance seems to also fall a little short of the street's optimistic expectations, the fundamental growth story remains in place.… More

Mediatek provided 2Q13 guidance which was far above expectations, with operating margin rising to 17.5% from 12.9% the previous quarter. R&D spending is trailing revenue growth as its two new basebands, the MT65898 and MT6572, which were designed in 2012, come to market now. Although 2013 should be a strong growth year for Mediatek in both smartphones and tablets, with its global market share still low, growth should continue in 2014 and beyond.… More

HTC provided disappointing guidance for 2Q13, pointing to margins and operating profits squarely beneath consensus. The street is holding out hopes that the new One smartphone will breath desperately needed new life into HTC. Although it may help for a quarter or two, HTC has some structural disadvantages relative to the competition which are not going away soon.… More

In 1Q13 the global smartphone market share of Windows increased by 50% in both Europe and the USA. Not only are the bears wrong about Windows Phone 8, but they are overly focused on Windows which accounts for only 25% of Microsoft's revenue. Although traditional PC sales are in decline, Microsoft has moved beyond the PC and transformed into a provider of cloud-based software and services.… More

Powertech surprised with stronger than expected margins in 1Q13. Going forward, although commodity DRAM volumes remain weak, the growth of mobile DRAM, NAND, and now logic, will push utilization and margins higher. AUO is also benefitting from rising utilization, if only because capacity growth has all but stopped. Both stocks are cheap, trading at BVPS or below. … More

After Samsung surprised the market with its sky-high margin of 19.8% on the IT & Mobile division, earnings forecasts around the street shot up. However, with 74% of earnings now coming from smartphones, which are clocking the highest margins outside of Apple, the question now arises how long can Samsung keep ASPs and margins aloft.… More

Apple announced 2Q-March-2013 results which were slightly above expectations, but gave guidance which was extremely disappointing. Margins are falling rapidly as Apple's weighted average ASP is falling due to consumers opting for legacy and lower-specced versions of the iPhone and iPad, a trend which shows no sign of reversing. Although, the market holds out hope for new products breathing life into growth, nothing is on the horizon.… More

Elan reported 1Q13 results which were slightly above expectation and gave strong 2Q13 guidance. What the market may not be aware of is that with its 50% share of Windows 8 touch controllers, as touch penetration rises in notebooks Elan’s Windows 8 touch IC revenue will double by 4Q13, then double again in 2014, taking weighted average margins high as it grows.… More