"Semiconductor stocks may be ahead of themselves," said Edwin Merner, president of Atlantis Investment Research Corp in Tokyo, who manages US$600 million.
Samsung, the world's No. 3 supplier of handsets and No. 1 in flat screens, may be among a few good investments next year on the strength of improving brand recognition and manufacturing efficiency, he said. Its price is just 8 times forecast earnings.
Samsung Electronics has been using the slump to turn the screws on rivals. Earlier this month, the company said it will build its sixth flat-screen production line to maintain its lead over rivals in Taiwan such as Picvue Electronics Ltd (碧悠電子).
Picvue Chief Executive Jacob Lin said in an interview he plans to start production of color displays for mobile phones from a new factory in Taiwan during the first quarter next year forecasting a 50 percent rise in sales this year.
Some investors said companies such as Samsung will supply higher quality screens faster and in larger quantities than Picvue can, he said.
"Picvue is entering the color-screen business too slowly," said Michael Ding (丁予嘉), who counts shares in the company among the NT$110 billion (us$3.2 billion) in assets he helps manage for International Investment Trust (國際投信).
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