Sunway is a major beneficiary of the new iPhone 16 Pro Max’s battery energy density upgrade

1. My latest supply chain survey indicates the energy density (Wh/kg) of the battery cells of iPhone 16 Pro Max will increase, which has the benefit of longer battery life with the same battery size or lower battery size with the same battery life.
2. Increasing the energy density of the battery cells will increase the battery temperature when running. To avoid overheating the battery, Apple uses the stainless steel battery case for the first time as a thermal solution.
3. Stainless steel is not as effective as aluminum in dissipating heat, but it is more robust and less susceptible to corrosion, so in addition to dissipating heat, the stainless steel battery case provides better protection for the battery and the iPhone system.
4. The use of a stainless steel battery case also reduces the difficulty of removing the battery, which will help Apple comply with the European Union’s requirements for mobile phone batteries’ replaceability in the future.
5. If the mass production of this new battery design (upgraded energy density of battery cells & adoption of the stainless steel battery case) goes well and the feedback is favorable, this new battery design will be adopted in all 2H25 new iPhone models.
6. Sunway is a major supplier of stainless steel battery cases. The contribution of this order to Sunway’s 2024 revenue is less than 5%, but due to Apple’s high requirements for stamping production processes, the gross margin is better than that of general metal stamping parts, which is favorable to the profitability of Sunway in 2H24. Looking forward to 2025, if all 2H25 new iPhones adopt this new design, the contribution of the order to Sunway’s 2025 revenue and profit is expected to grow by 200–250%, which will be favorable to Sunway’s 2025 business momentum.