Morningstar | MEMS Sensor Growth Slower Than Anticipated; Cutting Our TDK FVE to JPY 12,000
TDK is one of the top suppliers of passive components, especially focusing on the automobile industry. We estimate that TDK’s market shares in multilayer ceramic capacitors, or MLCCs, and inductors for automobiles amount to 40% and 50%, respectively. While we expect electronic devices per automobile to continue increasing, owing to the progress of safety and environmental regulations, there are still a limited number of component manufacturers that could meet tough requirements of automakers. Therefore, we expect TDK to remain one of the beneficiaries of auto digitalization.In the 2000s, TDK’s profit was mainly derived from PCs and TVs, by providing HDD recording heads and passive components, and in the 2010s, the majority of its profit was from handsets, by providing bandpass filters and polymer rechargeable batteries. TDK now aims to capture growth opportunities in automobiles, and is thus transforming its business portfolio.We believe that the alliance with Qualcomm in 2016 will be the turning point for the company. TDK decided to focus its business resources on pursuing growth opportunities in sensors especially for automobiles, and it therefore sold the bandpass filters business to Qualcomm and agreed to deepen collaboration with the latter firm in various industries. Proceeds from the sales were used to acquire Micronas Semiconductor, Tronics Microsystems, ICsense, and InvenSense, to collect key sensing technologies. TDK’s profitability may stagnate in the short run, as the company had sold the most profitable bandpass filter business and acquired the less profitable sensor businesses, but we believe that it will capture growth opportunities in the long run.TDK is a manufacturer of recording media, ferrite products and recording device products, and a producer of inductor, ceramic capacitor, magnet, HDD head and other components. Co.'s principal business segments are passive components, sensor application products, magnetic application products, film application products and others. Co.'s principal products include ceramic capacitors, aluminum electrolytic capacitors, film capacitors, inductive devices, high-frequency components, piezoelectric materials and circuit protection components, sensors, HDD head suspension, recording devices, power supplies and magnets, and mechatronics.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.