Samsung's Galaxy S4 Supplier Cheat Sheet

| About: Samsung Electronics (SSNLF)

Samsung (OTC:SSNLF) hopes its newly released Galaxy S4 will help erase Apple's (NASDAQ:AAPL) market share lead in the United States.

After all, when was the last time anyone asked to see your iPhone?

The company anticipates its much hyped S4 can tap consumer's appetite for something "different." If successful, early adopters of the S4 will become celebrities in coffee shops and commuter railcars worldwide.

How big a deal is it?

According to researcher Strategy Analytics, Samsung shipped 69.4 million smartphones during the first quarter, up 56% from last year. The rapid growth gave Samsung 33% of the global smartphone market.

For comparison, Apple sold 37.4 million iPhones globally, giving it control of 17.9% of the market - down from 22.8% a year ago.

While global market share has clearly favored Samsung, the story is a bit different in the United States where Apple's dominant 39% market share handily outpaces Samsung's 21.7%.

This suggests there are millions of units up for grabs this year with big implications for semiconductor investors.

The S4 supply chains offer familiar faces.

iFixit and Chipworks took the screws out of the Galaxy 4, giving us insight into which companies stand to benefit most from Galaxy S4 unit sales.

The most familiar face is Qualcomm (NASDAQ:QCOM), the dominant chip supplier found in most of the major market phones, including the S4.

Similar to the Galaxy SIII, North American S4's main processor is made by Qualcomm.

This time around, Samsung chose Qualcomm's 1.9 GHz quad core Snapdragon 600 APQ8064T. The chip, which integrates a 450 MHz Adreno 320 graphics processor, is also found in the HTC-One and is rumored to be powering the upcoming Motorola X.

Samsung also chose Qualcomm's MDM9215M modem to handle the S4's connection to hyper fast next generation networks from carriers including Sprint (NYSE:S) and AT&T (NYSE:T).

Qualcomm's WTR1605L seven-band 4G LTE chip, which won a slot in Google's (NASDAQ:GOOG) Nexus 4, is also inside.

And, in a nod to Qualcomm's increased focus on power management, the S4 uses its PM8917 and PM8821 power management chips. Those wins were likely tied - in part - to Qualcomm's acquisition of Summit Microelectronics last summer.

Finally, it's worth noting the Snapdragon 600 version of the S4 sold in North America also features Qualcomm's WCD9310 audio codec. The overseas Arm Holdings (NASDAQ:ARMH) inspired Exynos powered models will feature one from Wolfson instead.

Another familiar Samsung supplier is Broadcom (BRCM).

Broadcom remains Samsung's partner for Wi-Fi connectivity, supplying its BCM4335 5G baseband chips instead of the 4330 featured in the S3.

Broadcom also supplies its 20794S1A near field communications chip, which helps provide the S4's handy peer-to-peer sharing features.

Flip Broadcom's BCM4335 over and you find a Skyworks (NASDAQ:SWKS) 2.4 GHz SKY85303-11 WLAN/Bluetooth front end module.

Skyworks also provides its 77619 power amp module for quad band GSM/EDGE. The integration with Broadcom and consistent wins in leading phones suggest Skyworks remains a stable member of the broader mobile device market.

Silicon Image (NASDAQ:SIMG) is still supplying its MHL transmitter, this time providing its 8240BO model. The transmitter allows the S4 to deliver HD content directly to other devices, such as televisions.

And, Sony (NYSE:SNE) appears to be the winner of the image sensor, according to Chipworks.

Maxim (NASDAQ:MXIM) supplies a MAX77803 microcontroller, Sensirion supplies its SHTC1 humidity and temperature sensor and Synaptics (NASDAQ:SYNA) is in charge of the touchscreen control with its S5000B.

And finally, Chipworks reports Intel (NASDAQ:INTC), which supplied its PMB9811X Gold baseband processor in the prior generation, is in the Exynos powered S4 again with the PMB9820.

Across these suppliers, it's clear Qualcomm is the most closely tied to the S4's success or failure. So, if the S4 outperforms the SIII in sales, the Qualcomm should enjoy margin friendly unit growth.

Of course, the needle may move more substantially on the smaller suppliers such as Skyworks or Silicon Image. But investors need to remember those stocks also come with a lot more risk.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in QCOM over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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