Trip Chowdhry of Global Equities Research today writes that the worries about rumored supply-chain cuts in Apples (AAPL) iPhone production are overdone because the cuts pertain to a change of technology, not a change in demand patterns, in his opinion.
Chowdry, reiterating an Overweight rating on Apple shares and a $650 price target, argues Apple has been shifting from using traditional displays to instead use the emerging technology IGZO, a compound semiconductor made up of indium, gallium, and zinc-oxide.
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Chowdhry is convinced by what he saw at CES, and other trade-show events, that Apple is in fact moving to IGZO:
We attended various display conferences last year and the Consumer Electronics Show (CES) 2013 last week. Based on our discussions with technologists at these conferences, here is the converged view we got: Apple cut LCD orders by 40% to 80% not because the demand has declined by 40% to 80% but probably because Apple is shifting to IGZO (Indium Gallium Zinc Oxide) display techology; IGZO is ideal for large TV panels; IGZO is also ideal for flexible displays such as in the new iPhones, iPads and MacBooks; IGZO has 40 times faster response time than todays LCD TVs.
