J.P. Morgan tech analyst JJ Park today relates having hosted “major Korea tech companies” for an “tech tour” of Asia, and seeing indications chip prices will keep going higher, which could in turn dent demand.

The conversations seem mostly to have been with Samsung Electronics (005930KS) and with that other major Korean DRAM maker, SK Hynix (000660KS), though the report seems to have implications for other chip makers such as Micron Technology (MU) and electronics makers such as Apple (AAPL).

"One interesting observation,” writes Park, "is that all upstream and downstream component makers guided continued blended ASP increases across memory, rechargeable battery, MLCC, camera modules and even PCBs."

Among major components, SEMCO remained the most optimistic on continued MLCC price increase in the next 6-9 months under moderate supply growth from Japanese suppliers. Contents growth at dual-cam seem to be more based on volume growth rather than specification upgrades and we confirmed progress/ interest from both corporates/investors on 3D sensing potentially used for more than facial recognition and multiple brands. From the non-mobile side, EV battery and related supply chain received the most interest. SDI seemed convinced about the cost/technology roadmap and targets EV/ESS battery turnaround from 2H18.

As a result, smartphone makers "expect product prices to continue to move up."

"If that is the case,” concludes Park, "we could see weaker-than-expected end- demand amidst product price increases, which eventually leads to disappointing end-demand."

The report of higher costs and higher prices comes as Apple is widely expected to unveil a new iPhone this month that may come with a much higher price tag than prior models.

By: DocMemory
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