While the recall of the Galaxy Note 7 is a costly embarrassment for Samsung (SSNLF) , Pacific Crest Securities suggested in a Wednesday note that it should be a "non-event" for chipmakers such as Broadcom(AVGO) - Get Report , Maxim Integrated Products(MXIM) - Get Report , Qorvo(QRVO) - Get Report and Synaptics(SYNA) - Get Report that have exposure to the device.
Samsung is likely to replace entire Note 7 devices and not just the problematic batteries, according to checks with suppliers that Pacific Crest analyst John Vinh conducted. "We expect additional component orders as a result of the scrappage to be offset by demand being pushed out and net component orders to remain at roughly 12 million units for [the second half of 2016]," Vinh wrote.
Broadcom did not disclose sales to Samsung in recent Securities and Exchange Commission filings. Shares of the company gained $4.34, or 2.6%, to $1.69.58 on Wednesday afternoon. Pacific Crest has a $200 price target on the stock.
Qorvo generated about 7% of fiscal year 2016 sales from Samsung, down from 25% in 2014. The stock, for which Pacific Crest does not have a target, gained $1.20, or 2.2%, to $55.12 on Wednesday.
Meanwhile, Samsung and its affiliates accounts for 21% of Synaptics' net revenue. Synaptic rose 28 cents, or about 0.5%, to $58.15. Like Qorvo, Pacific Crest does not have a target for the stock.
Maxim gets 14% of net revenues from Samsung, which is its largest client. Shares rose 52 cents, or nearly 1.4%, to $38.69. Maxim gets a $42 target price from Pacific Crest.
Sprint(S) - Get Report and T-MobileUSA(TMUS) - Get Report have announced strong pre-orders of the devices. As upset as Apple devotees have been about the iPhone 7's lack of a headphone jack, the deficiency is cosmetic compared to the Galaxy Note 7's potentially combustible batteries.
Heavy promotions by the wireless carriers could also drive sales of the new Apple devices. AT&T(T) - Get Report , Sprint, T-Mobile USA and Verizon(VZ) - Get Report are all offering $650 trade-in credits for subscribers returning an iPhone 6 or 6s, UBS analyst John Hodulik observed in a Tuesday note. "The carriers offered trade-in programs last year, but trade-in values are [about double] those offered in 2015, making the promos even more compelling," Hodulik wrote.
Pacific Crest's Vinh downplays the likelihood of defections from Samsung to Apple. "Our carrier survey indicates limited evidence of consumers switching to the iPhone as a result of this recall," he wrote.