As the mobile phone market gears up for its traditional peak season, Win Semiconductors, the leading GaAs (gallium arsenide) wafer foundry, is poised to capitalize on the growing demand for power amplifiers (PA). The company anticipates that flagship models from major mobile brands in the latter half of 2024 will drive a significant uptick in operational momentum, despite initial capacity estimates remaining elusive. Win Semiconductors asserts that the industry's nadir has passed, forecasting that both output and revenue for 2024 will surpass 2023 levels.
Win Semiconductors' mobile applications, a cornerstone of its revenue, are set to see renewed vigor as flagship models roll out from the third quarter onward. However, with customer models still under dynamic adjustment, early capacity projections remain unclear. A more definitive outlook is expected post-second quarter.
Notably, Win Semiconductors holds a dominant position in the high-end mobile phone market. The anticipated surge in demand for foldable phones, AI-enhanced devices, and other flagship models in 2024 is expected to propel growth in both Cellular and Wi-Fi segments.
DIGITIMES Research reports that global mobile phone shipments reached 281 million units in Q1 2024, marking a 6.7% year-on-year increase. Projections for Q2 2024 suggest shipments of 274.3 million units, with an annual growth rate of 8.3% due to a lower base period. Annual shipments are estimated to hit 1.168 billion units, slightly exceeding 2022 levels.
Win Semiconductors is set to benefit from this single-digit annual growth in mobile phone shipments, expecting its annual output and revenue to outpace 2023. With a monthly capacity of 43,000 wafers from its three 6-inch wafer plants, the company is well-positioned to meet annual demand.
Beyond short-term mobile phone growth, Win Semiconductors is bullish on the continued rise in Wi-Fi 7 penetration, which promises to elevate PA shipments. Upstream IC design firms forecast a pronounced growth in Wi-Fi 7 adoption in the latter half of the year. Strong stocking momentum from both American and Taiwanese companies suggests that most flagship models will incorporate Wi-Fi 7 specifications.
Early indicators from Win Semiconductors' Q1 revenue reveal Wi-Fi as the most robustly growing segment. Both mobile phone and router sectors are witnessing a surge in demand for Wi-Fi 6E and Wi-Fi 7. While Wi-Fi 6E remains predominant, the market is gradually transitioning towards Wi-Fi 7, spurring additional PA demand.
Win Semiconductors is confident that the enhanced bandwidth, frequency, and linearity requirements of Wi-Fi 6E and Wi-Fi 7 will narrow the gap between GaAs and Si-based PAs. This shift could sustain GaAs's market position, encouraging the adoption of the new generation GaAs HBT 7, which meets more complex signal modulation protocols, and offers superior frequency and linearity performance, enhancing design flexibility and differentiation.
In the realm of 3D sensing modules, Win Semiconductors had traditionally focused on smartphones. However, the entrance of multiple suppliers by major clients has reduced its market share, leading to a decline in optical revenue in Q1. The company is now vigorously expanding into automotive product lines, including in-car sensing and external autonomous driving assistance systems (ADAS), aiming to increase its automotive optical market share.
