- The Hong Kong stock market's mobile industry chain sector faced a collective decline, with FIT Hon Teng leading the fall by over 5%. Core suppliers such as Tongda Group, Q Technology, and Cowell Electronics followed suit. The main reason is the significant rise in the cost of purchasing chips and memory chips, sparking deep concerns in the market about end-consumer demand.
- The shortage of memory has driven up the prices of new terminal devices by 10% to 30%, causing domestic consumers to extend their phone replacement cycle to over 36 months. The early release of demand has led to an overdraft effect, with the industry chain facing the dual pressure of demand being brought forward and declining sales.
- Leading terminal manufacturers, including Apple and Huawei, have adjusted or announced increases in hardware prices. As AI data centers occupy storage capacity, institutions like CITIC Securities point out that the cost struggle upstream in the industry chain will intensify further.
Supply Chain Sector Under Pressure
Hong Kong stocks in the mobile industry chain have seen a significant pullback, with FIT Hon Teng (6088.HK) down 5.6%, Tongda Group (0698.HK) down nearly 5%, and Q Technology (1478.HK) and Cowell Electronics (1415.HK) falling by 3% and 2.5%, respectively. The surge in chip and storage component costs has squeezed the market, prompting funds to temporarily exit for risk aversion, leading to a revaluation pressure on the optical and component sectors. Selling pressure is mainly concentrated on high-beta supply chain targets, reflecting increased investor concerns about narrowing downstream profit margins.
Price Increases Suppress Replacement Demand
The imbalance in the supply and demand of storage components has raised the production costs of complete machines, prompting terminal manufacturers to generally increase new device prices by 10% to 30%. The rise in retail prices directly suppresses consumers' willingness to replace their phones, further extending the domestic phone replacement cycle to over 36 months. Previously, some consumer demand was released early before the price increase, creating a negative cycle of demand being brought forward and declining sales, leading to cautious expectations for long-term shipment growth in the mobile supply chain.
Leading Giants Raise Hardware Prices
Apple (AAPL:US) has increased the prices of its iPad and Mac product lines by 15% to 25% and has clearly hinted at the risk of further price increases for future products. Huawei's terminal head also stated that high memory costs are forcing the industry to face overall price pressure. The trend of mainstream brands following suit in raising prices indicates that cost pressures are being fully transmitted to the consumer end, which may weaken the overall strength of the consumer electronics peak season in the third quarter, limiting the profit flexibility of related component suppliers.
AI Demand Restructures Cost Struggle
The acceleration of AI data center construction has led to a significant occupation of global storage capacity, squeezing the supply share of components in the consumer electronics field. CITIC Securities analysis points out that as computing power infrastructure construction continues to siphon upstream resources, the price struggle between upstream manufacturers and terminal brands will enter a more complex stage. The rising pricing power upstream is gradually reshaping the profit distribution pattern of the entire technology industry chain.
