The local stock market will enter phases of corrections as the anticipated economic recovery will be slow and gradual, analysts at UBS Securities Pte Ltd said yesterday after wrapping up its two-day Taiwan Conference, with 260 company executives and investors participating.
“The end demand hasn’t picked up yet as the economic recovery will be a slow, L-shaped one, which represents weaker-than-expected fundaments to bolster the stocks’ further spike,” William Dong (董成康), managing director and head of the firm’s Taiwan equities, told a media briefing yesterday.
Dong said he was conservative about the local economy’s short-term prospects but positive on long-term developments once “opportunity knocks” following closer economic ties between Taiwan and China.
Taiwan’s inking of an economic cooperation framework agreement (ECFA) with China will be crucial to providing a boost to the domestic market in 12 to 18 months, he said.
UBS analyst Jonah Cheng (程正樺) said he had a “neutral” view — a shift from his previous “overweight” rating — on the semiconductor sector, saying he expected greater inventory risks in the next quarter and seasonal demand may not be as strong this year.
“The sector’s upstream manufacturers may be experiencing a V-shaped recovery, but its downstream manufacturers may face an L-shaped recovery,” he said at the briefing.
Arthur Hsieh (謝宗文), the firm’s electronics hardware analyst, forecast limited upside for technology shares in the next few months as inventory restocking orders would gradually taper off and end demand would remain sluggish.
However, the niche smartphone market could see growth in the second half of this year, depending on how fast telecom operators are able to promote 3G sales, Hsieh said.
He forecast sequential growth of about 20 percent in the third quarter, but said that visibility for the fourth quarter remained unclear.
As for financial shares, the sector’s recent rally was mainly driven by investor sentiment, as fundamentals remained weak, UBS financial sector analyst Pandora Lee (李懿璇) said.
Lee said that potential Chinese investment would only benefit “one or two relatively stronger Taiwanese banks with connections to the ruling party as a political showing.”
Among the nation’s 14 financial service providers, Lee estimated a capital shortage of between NT$4.5 billion (US$136.8 million) and NT$11.1 billion and a potential share dilution from 3 percent to 14 percent, she said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts