A Wall Street Transcript Interview with Patrick Wang, Managing Director of Evercore: Components Manufacturers Exposed to Auto, Mobile and Infrastructure are in Rapid Growth Mode

Wall Street Transcript

67 WALL STREET, New York - October 18, 2013 - The Wall Street Transcript has just published its Electronic Components Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Mobile Device Consumer Demand - Mobile Trends in Emerging Markets - Smartphone Operating Systems - Outsourcing and Offshoring Trends - Electronics Manufacturing Supply Chain - Automotive, Data Center and Mobile Spending

Companies include: Cisco Systems, Inc. (CSCO), Intel Corporation (INTC), Advanced Micro Devices Inc. (AMD), Apple Inc. (AAPL), Texas Instruments Inc. (TXN), Monolithic Power Systems Inc. (MPWR), Broadcom Corp. (BRCM), NVIDIA Corporation (NVDA) and many others.

In the following excerpt from the Electronic Components Report, a 2012 Wall Street Journal "Best on the Street" research analyst discusses the outlook and his top picks for investors:

TWST: What do you cover in the electronic components space?

Mr. Wang: From my standpoint, I'm looking specifically at semiconductor components. That is the majority of the electronic component if you think about it, because what you are talking about is powering a device - you are converting sound, temperature, light to digital, doing calculations or something else like outputting information like video, you are doing something that requires the use of a semiconductor device. Any of those types of actions are going to require a semiconductor device.

Over time, you have seen the importance of that semiconductor increase. I will give you an example. If you take a look at the automobile, cars have gone through many, many electrification upgrades, and thanks to Tesla (TSLA), I think we are on the cusp of an acceleration of that model where you're taking a very legacy and archaic design of the car and improving on it with modern electronics.

Automobile makers are now using much more electronics to make the car smarter, more efficient and more appealing to consumers. The electronics, and the semiconductors behind those electronics, are making a very big difference and are making the cars much more appealing to the consumer these days.

TWST: Since you mentioned the automobile market and the growth there, I'm guessing the companies with auto exposure are well-positioned right now. Are there other subsectors in the space that are particularly well-positioned?

Mr. Wang: Although auto is growing, it is actually a relatively small market. The biggest market for semiconductor devices is the PC. Forget all the talk about the death of the PC that we hear in the media all the time. PCs and peripherals are still the biggest chunk of the market at roughly 50%. This includes PCs, peripherals, laptops, desktops, servers, monitors, all of that. A few years ago, that accounted for roughly two-thirds chip sales, and today it's about 50%.

Then, looking at other areas, it's hard to ignore the smartphone. The smartphone is clearly a very fast-growing portion of the semiconductor market. You're seeing it cannibalize the PC market. You can't fight global secular trends like this. While there's already deep penetration in the United States, there's still tremendous upside in areas like China and India. Similarly, another key market is the...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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