Taiwanese technology stocks may benefit next year from new models and contracts to make products for other companies, helping to boost the benchmark TAIEX further, Macquarie Group Ltd said.
The companies may gain especially from “outsourcing” by Japanese customers and demand for third-generation mobile phone handsets, Macquarie said in a report yesterday.
“In the past few years, Taiwan has narrowed the technological and design capability gaps with Japan,” Macquarie analysts led by Daniel Chang (張博淇) said. “Taiwan has been building a solid and complete component supply chain.”
A measure of technology stocks on the MSCI Asia-Pacific excluding Japan index has jumped 64 percent this year on speculation that demand for computers and other electronics will increase as companies launch additional products and spending rebounds. That is better than the 42 percent gain in the regional benchmark index and is the best performer among 10 industry group.
Macquarie said increased outsourcing from Japan is a “mega trend” as many brand vendors are trying to contract out manufacturing to Taiwan to secure profitability.
Wistron Corp (緯創), the world’s third-largest maker of laptops and Altek Corp (華晶), a camera maker, will gain most from the subcontracting.
MediaTek Inc (聯發科), Taiwan’s largest chip designer, will be the “key beneficiary” as China telecommunications operators boost their capital expenditure spending to offer third-generation (3G) services.
Macquarie expects the replacement cycle for China 3G to start in 2011 and handset makers “that find favor with Chinese operators should enjoy a corresponding market share.”
Taiwanese technology companies will also gain because of new products next year, the research house said.
Acer Inc (宏碁) and Wistron may triumph on the introduction of Microsoft Corp’s new operating system, Windows 7, and contract makers such as Wintek Corp (勝華) and Largan Precision Co (大立光) may thrive on contracts to manufacture Apple’s iPhone and potential new products, the report said.
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