Electronic components: refocusing on high-value-added North American smartphone components and AI computing

Morgan Stanley MUFG Securities Co., Ltd.+Shoji SatoEquity AnalystShoji.Sato@morganstanleymufg.com+81 3 6836-8404Sota HarashimaEquity AnalystSota.Harashima@morganstanleymufg.com+81 3 6836-8897 Electronic Components: Renewed Focus on Value-Added N. American Smartphone Components Plus In addition to proliferation of devices leveraging AI computing, we expect F3/27 earnings for suppliersof high value-added components in N. American smartphones to top consensus. Electronic Components JapanIndustry View Key Takeaways OW on TDK: Top Pick. Earnings expansion for rechargeable batteries and HDD-related products.OW on Murata Mfg: Growing demand and utilization rates for high-value-added MLCCs.OW on Alps Alpine: High-performance camera actuators to ramp up from Apr-Jun.OW on Niterra: Continued earnings growth for replacement plugs and SPE electrostatic chucks.OW on Hirose Electric: Earnings expansion for general industrial machinery/AI server connectors. Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As a result,investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of Morgan StanleyResearch. Investors should consider Morgan StanleyResearch as only a single factor in making their investment For analyst certification and other important disclosures,refer to the Disclosure Section, located at the end of thisreport. += Analysts employed by non-U.S. affiliates are not registeredwith FINRA, may not be associated persons of the memberand may not be subject to FINRA restrictions oncommunications with a subject company, public appearancesand trading securities held by a research analyst account. Renewed Focus on Value-Added N. American Smartphone Components Plus AIComputing Contents Ibiden: Medium-term Results and ForecastsConnector MarketConnector Coverage Companies: Medium-term Results and ForecastsGlobal Market Share Trend and Split for Spark Plugs / Exhaust Gas Oxygen SensorsNiterra: Medium-term Results and ForecastsSmall SizeLiBMarket OverviewTDK:LiBEarnings Expansion, Major Acquisition and Transfer of BusinessTDK: Actions for Business Portfolio ImprovementTDK: Mid-term Results and ForecastsiPhone Sell-in Forecasts / iPhone Camera Actuators by ModelAlps Alpine: We Expect New Smartphone Camera Actuators to Contribute to EarningsPWB MarketMeiko Electronics: Mid-term Results and ForecastsHDD Market by Company (Quarterly, Fiscal Year)HDD Head MarketHDD Motor MarketSupply Chain of HDDs Production & Inventory Note: *3-month averageSource: METI, Company data, Morgan Stanley Research Preparing for Smartphone Price Compression and Slowdown in Technological Innovation Memory Price Outlook MLCCMarket Data Capacitor Market: 016008 MLCCs are 75% Smaller than 0201MLCCs Supply Chains of MLCC and Aluminium Capacitors ■Size and # of layers for NVIDIA ABF packages Connector Market Connector Coverage Companies: Medium-term Results and Forecasts Global Market Share Trend and Split for Spark Plugs / Exhaust Gas Oxygen Sensors Small SizeLiBMarket Overview TDK:LiBEarnings Expansion, Major Acquisition and Transfer of Business TDK: Actions for Business Portfolio Improvement Alps Alpine: We Expect New Smartphone Camera Actuators to Contribute to Earnings Note:MSe/e = Morgan Stanley Research estimates, Ce = Company estimatesSource: Companydata,MorganStanleyResearch Note: e = Morgan Stanley Research estimatesSource:Prismark, Morgan Stanley Research Supply Chain of HDDs Minebea Mitsumi:Key Financial Data and Risk Reward Mabuchi Motor:Key Financial Data and Risk Reward Alps Alpine:Key Financial Data and Risk Reward Murata Manufacturing:Key Financial Data and Risk Reward Disclosure Section The information and opinions in Morgan Stanley Research were prepared by Morgan Stanley MUFG Securities Co., Ltd. and its affiliates (collectively, "Morgan Stanley"). For important disclosures, stock price charts and equity rating histories regarding companies that are the subject of this report, please see the Morgan Stanley Research Disclosure Website at www.morganstanley.com/eqr/disclosures/webapp/generalresearch,or contact your investment representative or Morgan Stanley Research at 1585 Broadway, (Attention: Research Management), New York, NY, 10036 USA. For valuation methodology and risks associated with any recommendation, rating or price target referenced in this research report, please contact the Client Support Team as follows: US/Canada +1 800 303-2495; Hong Kong +852 2848-5999; Latin America+1 718 754-5444 (U.S.); London +44 (0)20-7425-8169; Singapore +65 6834-6860; Sydney +61 (0)2-9770-1505; Tokyo +81 (0)3-6836-9000. Alternatively you may contact your investment representative or Morgan Stanley Research at 1585 Broadway, (Attention: Analyst Certification The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have no