文 | Russell Flannery
Taiwan's benchmark stock index rose 0.7% yesterday to close at 20,857.71 points, a record high, after surging nearly 35% over the past 12 months thanks to the development of AI-related semiconductor and network providers. Recently, I interviewed Dan Nystedt, vice president of Tri-Orient Investments, a family office investment firm. As a senior analyst in Taiwan's technology sector, Nystedt said in an interview that the sales of upgraded devices, including smartphones, may continue to rise in the future, further promoting the development of Taiwan's leading manufacturers and design companies.
On July 10, 2023, the prices of various stocks were displayed on an electronic screen at the Taiwan Stock Exchange. Yesterday, the exchange's benchmark index closed at an all-time high. Photo credit: I-Hwa Cheng/Bloomberg
According to Nystedt, Taiwan has been a leader in chips and computer hardware for the past few decades, and is now "at its best" thanks to the change in AI technology. In addition to semiconductors, which have recently seen a surge in sales, mobile phones and PCs are also about to enter an upgrade cycle.
Last year, the stock prices of many Taiwanese companies increased, including the U.S.-listed company Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC). On Friday, TSMC's stock price in the United States hit a record high after announcing that the company's April 2024 revenue increased by 60% year-on-year. TSMC's customers include AI chip heavyweights Nvidia and Apple.
Taiwan's influence in the technology manufacturing industry can be traced back to the 80s of the 20th century, when Taiwan entered the field with the personal computer business. Huang Qinyong, a senior expert in Taiwan's information technology industry and founder of Taiwan's science and technology daily Electronic Times, said that in recent years, some outstanding Taiwanese technology manufacturing companies have been able to establish cooperation with global heavyweight technology hardware companies such as Amazon and Microsoft by virtue of their accumulated global influence.
Nystedt believes that in terms of the semiconductor industry, Apple's supplier TSMC is the best performer. But other Taiwanese chip design companies, including MediaTek and Worldchip, are also growing rapidly and preparing for continued growth. In addition, some businesses that manufacture servers for data centers will also benefit, and such servers will process the vast amount of information that will grow as a result of AI applications. "Servers in data centers will be the next big focus," he said. "Some companies have already benefited from this wave of future growth, with Wistron being spun off from Acer and Wiwynn doubling their profits last year.
Last year, the share price of MediaTek, a Taiwanese smartphone chip design company helmed by billionaire Tsai Ming-kai, rose by nearly two-thirds. IMAGE CREDIT: SOPA IMAGES/LIGHTROCKET VIA GETTY IMAGES
However, computer equipment has to share some of the workload of data center servers. "Your PC will help run the AI programs you have installed, so you don't have to use all the internet bandwidth," Nystedt said. "A number of companies are poised for increased PC hardware sales due to growing private computer shipments, including Foxconn, a large Taiwanese contract manufacturer founded by billionaire Terry Gou, and Quanta Computer, founded by billionaire Barry Lim. This wave will also boost the development of Taiwanese small module producers such as Fusda, Zhaoli Technology, and Xinrixing. According to Nystedt, "There is a consensus that all high-end smartphones will become AI-based models in the future, especially foldable phones, although time has not yet proved this. ”
From a global perspective, high-performance chips and devices related to artificial intelligence have good prospects in terms of promotion. "With companies like Baidu and Xiaomi, China is going to be a driving force in the future, and we're going to see a lot of amazing developments. The people there became purchasers at a very early age. They really like to buy emerging things. I think we're going to see a lot of new software coming out of people's phones in China very soon. This is a huge opportunity for China because there are a lot of big phone manufacturers there. ”
Nystedt also sees a growing synergy between Taiwan and Japan, with more and more Taiwanese capital and talent starting to collaborate with their Japanese counterparts. "Recently I heard an interesting thing that the price of an apartment in Tokyo is cheaper than in Taiwan. So, it's a high-tech advanced area with top-notch engineering schools, and in Taiwan, you can set up a chip design company that creates brilliant performance. ”
"So both Japan and Taiwan are ready for further development, and companies from both sides are well suited to work together," he agreed. TSMC previously established the company's first factory in Kumamoto Prefecture, Japan, with its partners, and announced plans to open a second Japanese factory in February this year.
On the left, TSMC's new plant in Kikuyo Town, Kumamoto, Japan, was taken on February 23, 2024. Photo credit: Toru Hanai/Bloomberg
Translated from https://www.forbes.com/sites/russellflannery/2024/05/13/taiwans-wide-ai-sweet-spot-lifts-its-main-stock-index-to-record-high/?sh=57d992956d12